How to Take Advantage of (and Maintain) a High Credit Rating
Raising a low credit rating can be a long and difficult process. Once you get that number into a satisfactory range, you deserve to feel proud of all the work you’ve done; but once you stop worrying about how to raise the score, you start worrying about how to maintain it . Here’s what you can do with this record now that you have it, and still make sure it stays high.
How to maintain your credit score
Before you start thinking about anything you can do now that your credit rating is in the green zone, you need to practice keeping it high. You put in a lot of effort, and the timely payments you made or the cards you paid will continue to be reflected in your bill, but your bill may still go down.
For starters, never neglect a payment or line of credit, even if one line has a higher interest rate than another. Treat everyone equally, pay everyone on time, and stay alert. Don’t close old lines because your credit history is about 10% of your total score. It might be tempting to get rid of all your credit cards to reduce the chances of being misused, but it’s best to keep them and exercise restraint in their use.
That being said, having too many open lines of credit is also bad for your account, so combine some of your cards if possible. Ask the bank about the card to transfer the balance of funds – once your grade is good again, it will not be as difficult to obtain it as it would be when your grade was lower. See? New opportunities are already opening up for you. Take this as a good sign that all your work here was worth it (and a reminder that you cannot afford to back down).
Simplest advice: don’t live beyond your means. Credit cards do not contain magic money; they simply represent money that you have not yet spent.
What you need to know about your credit score
Even if your score is already high, you can still learn a thing or two about how this cryptic metric works.
“Learn,” said finance specialist B. Hernandez of BPH Ventures . “For example, there are three credit bureaus: Equifax, TransUnion and Experian. These are private organizations that use your public and private data to rank your ability to pay off debt. Lending companies like banks and credit card companies use this to figure out how much you can borrow and what percentage they can charge you. The scores can range from 300 to 850. Depending on the lender considering your loan, below 600 is not very good, and above 750 is excellent. Most Americans are in the 600 to 700 range. “
Being aware of how your account is performing and changing is the key to maintaining and making the most of it. When you receive your credit report, always check it carefully for any errors that may occur. Knowing exactly what your report says – and a little hell of a customer service noise when it says something wrong – will help you keep it in a stable range.
“You can call or write letters to the bureau and ask them to remove inaccurate information,” Hernandez said. “Inconsistencies matter because lenders will punish you with rejection, additional verification steps, or higher rates for inaccurate information. If they cannot prove that the incorrect items are accurate, they have 30 days to remove them. This is the law. “
How to control your credit
While you are on the lookout for fraud, it is worth considering what options you have for raising and maintaining your account other than verifying it yourself. Some credit repair companies have a higher reputation than others, so find out who can help you with all the disputes you are planning or determine what you should dispute before doing so.
Once the account was needed, Hernandez said, “Sign up for a credit monitoring service. Basic free plans are available from companies like Credit Karma , which is robust but limited as it only shows two of the three reporting bureaus – Equifax and TransUnion. Most banks also have their own methods of calculating your credit rating, but it is generally best to get reports directly from the bureaus themselves. I am using IDnotify to get reports. They show three reports side by side, so inaccuracies are easy to spot. They also tell you when your loan has been taken out, so it’s a good watchdog in case of potential identity theft. This option costs about $ 21 a month, but it is worth its weight in gold because it shows you everything on your report exactly as it does on a monthly basis. “
It is clear that whether you pay for a portion of your credit card or buy a monitoring service, you have to spend money to make money. But once you do …
How to take advantage of good credit history
What did you mean when you raised your credit rating? Did you want a new car, a house, or just to avoid the phone calls with payment reminders? Be that as it may, you can now confidently – but carefully – move in the direction of your dreams.
“It’s time to take advantage of good credit history,” Hernandez said. “Ways to do this include refinancing high interest rate credit cards or loan balances. A good rule of thumb is to get rid of toxic debt or debt in excess of 10%. Another way to do this is to use a mortgage to buy a home, which tends to rise in value over time. In general, use your good borrower status to get financing as cheap as possible. ”
Remember everything you have learned along the way to building credit and reap some of these benefits – responsibly, of course.