“Mistakes you have made in your past can haunt you for many years to come.”

That statement is never truer than when it comes to your credit. Since it is National Get Smart about Credit Day, here are 5 tips that can be used to achieve, or help you maintain, a good credit score.

  1. Only apply for credit when necessary

There are many benefits to using credit, but too much can be a bad thing. It can lead to overspending or accumulating inquires on your credit. It may be best for you to minimize your sources of credit if you’re concerned that you may have a hard time paying it back. Don’t let this scare you from getting a card or making an effort to help build your credit. Building a credit history is necessary for applying for mortgages, auto loans and many other loans.


  1. Keep a healthy balance between cash/debit and credit

While using too much credit could work out poorly in the long run, not using credit at all is slightly counterproductive. There should be a healthy balance between the amount of cash transactions and credit transactions you do. It doesn’t need to be 50-50 by any means. If you are trying to build credit, strategically using your card (by using it only when you buy gas, groceries or go out to eat) could be an effective way to start that process.


  1. Get a secured credit card

For those without any previous credit history, or someone with some blemishes on their credit, this may be something you want to consider. A secured credit card is a card that has money being held in some sort of deposit account set off to the side. As long as you have the card, the money is held by the institution. The deposit account can also reflect positively on you, so if you ever miss a payment the account will be used to cover the balance.


  1. Don’t fall behind on payments

This is a good tip regardless of whether you are trying to improve your score, or maintain what you have now. For some this may be more difficult, but it is a big key to keeping your credit in good shape. If you’re a forgetful person, it may not be a bad idea to set up reminders on your phone, or use a calendar to help remind you of upcoming bills and other payments you have. You will want to avoid letting anything get sent to collections as this will have a big impact on your score. Bills sent to collections stay on your credit for 7 years. By paying on time, you’re not only helping your credit, but also minimizing unneeded stress as well.


  1. Keep track of your balances

In addition to paying on time, you also want to keep an eye on the amount being spent on the card. One of the factors that goes into your credit score is credit utilization. Credit utilization is the amount of credit you’ve used compared to your credit limit. If you have a $1,000 credit limit, and have used $100 of that credit, your credit utilization is 10%. A good percentage is considered by many to be 30% or lower. With that said, your credit score is always better when the balance on your card is lower when compared to the total amount of credit available. We’re not saying don’t make big purchases on a credit card, but if you do use the card, you should be prepared to pay it down sooner rather than later.

With the importance of having good credit, it is always in your best interest to do what you can to have the best credit score you can. It may be difficult at times, but there are ways to rebound. By using these methods, you will be able to maintaining your advantageous score or start to improve it, even if you have hit a bump in the road.

5 Tips for Maintaining a Good Credit Score

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