A credit score is important because it is a like a school report card which shows if you have been good in paying off any debts or accounts you owe money on. Banks and other companies that loan you money use the credit score to evaluate you financially.
A good score will allow you as an individual to borrow more in future from the banks and similar places.
So how do you ensure you keep a good credit score?
This article recommends 7 tips that will help you ensure you keep a good credit score.
The 7 tips to keeping a good credit score:
The Credit Report is similar to a score card which shows the financial grading and status of an individual based on his or her exposure to credit or borrowed money, as well as their account payment history.
To know what your status is on a Credit Report will determine if you have a good credit score.
If you analyse your monthly spend based on your income, you can control how much exposure you have in terms of your credit used.
Where possible, look for inactive retail accounts which can impact on your credit score since inactive accounts bring the overall credit score down.
Having a stable job is confirmation of stable income; staying in the same residence is also a good indication of stability. Both factors increase your credit worthiness.
Being consistent with your payments due on accounts will mean your credit report will be in good standing as creditors can report positive information on payments.
As an example, if you cannot meet a full payment for a credit card account, ensure that you will at least pay the minimum due so that this information is reported for a better credit report score as opposed to making no payments and receiving negative scores.
Do not apply or inquire for the same type of credit in multiple institutions. This habit is an indication of ‘credit hunger’ and reflects poorly on you as an individual, decreasing your overall credit score.
Always check to ensure the accounts you own have all your correct contact and name details.
Having the wrong details could mean the wrong score being reported on your credit report, thereby decreasing your overall credit score.
It’s always good practice to keep at least one credit based account open so that there is available credit history on your profile.
Maintaining one credit account will help financial institutions in making a credit offer based on some previous credit history.
The bottom line is that you need to be prudent on your financial matters and how you handle your expenses. As long as you track your spend in relation to your income, you will be fine.
Fraudcheck is readily available to assist you where you may have doubts or seek further clarification on your credit profile.