9 Strategies To Keep A Good Credit Score Rating
- Pay your debts early, not just on time. If you pay your credit cards, installment loans and mortgage loans as much as three weeks early for a few months time, your scores will rise.
- Pay more than the minimum amounts. If you can, regularly pay at least $25 per month over the minimum required payment amount.
- Use every credit card you own once every five months, even if its only for gas, groceries or clothing. This moves the date of last activity up in time, improving your scores. It also will prevent credit card companies from closing your accounts for lack of use. The message closed by credit grantor is not good for your credit.
- Pay credit card balances below 73 percent of the credit limit for one score boost. Pay below 48 percent of the limit for another score increase. If you must carry a balance, the ideal balance is 30 percent to 48 percent of the credit limit.
- Never close your oldest credit card. Dont close credit cards at all if you carry large balances. Always keep at least two major credit cards open with the highest limits you can get, but avoid the temptation to spend. You can keep all major cards open and not harm your scores.
- Adding 25 percent or more to a credit card balance will drop scores. We have found that even charging $5 on a card with no balance dropped the credit scores six to 10 points.
- Auto loans with payment periods of 24 to 48 months are best for scores. Payment periods of more than 48 months harm scores. Auto leases seem to be worse for scores than loans.
- Frequent refinancing of home loans harms scores.
- A home equity line of credit acts just like a big credit card when it comes to credit scores. Keep the balance below 73 percent and below 48 percent of the credit limit. A closed-end, or fixed-rate, second mortgage does not harm scores like a home equity line of credit can.
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