Here are a few tips to help you keep your credit score in good standing. Keep your credit score high by avoiding new lines of credit. Also, pay all collection and charge-off accounts. Also, diversify your credit mix by keeping credit cards open. This will decrease your risk of building up large debt loads and increase credit scores.
Refrain from applying for credit cards.
Avoiding new credit card applications is the best strategy for credit cards. A new application can negatively impact your credit score. If you have existing debt, it is a bad idea to apply for credit lines. Instead, focus on paying off your existing cards and saving up for a large purchase. A good credit rating will allow you to qualify for the best rates in loans, credit cards and rentals apartments.
Diversify Credit Mix
The ideal mix of revolving and instalment credit is optimal. It is easiest to use revolving credits by opening a credit card and paying it off on time each month. Keep in mind that you should only charge what you are able to afford to pay each month. This will prevent you from accruing interest. A personal loan is a good option if you don’t have an existing installment loan. It will demonstrate your ability to manage both types.
Recover any charges or collections owed
Although it's not always easy to remove charge-offs and collections accounts, they are certainly worth your time. This process can take time, but smart planning can help speed it up.
Credit cards should be kept open
It is important to have at least one credit-card account in order to maintain high credit scores. You need to use your card regularly and not just keep it open because it is convenient. Multiple accounts can be difficult to track and could increase fraud risk. While it is recommended to keep all your accounts open at all times, experts suggest that you only have one card.
Avoid making hard inquiries
Applying for too many credit cards or loans in a short period of time can lower your credit score. A single inquiry will not affect your credit score. However, it is better to avoid multiple inquiries throughout the year before applying for any mortgage or loan. Hard inquiries remain on your credit report for one year and stay there for up to two years. Keep in mind that not all credit decisions are based on your score; lenders may consider other factors.
Avoid closing credit cards while you have balances on other cards
To maintain a high credit score, it's important to avoid closing credit cards while you have balances on another card. Your credit score will depend on how you report activity. If you close a card without paying it off, you run the risk of being "credit invisible." However, some credit card companies will waive annual fees or convert fee cards into no-fee cards if you pay them off in a reasonable timeframe.