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How to keep a high credit score



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If you're wondering how to maintain a high credit score, there are some key factors you must consider. First of all, your utilization rate is a major factor in your overall score. Paying your bills on time can impact your score. Paying off any charges or collections that you have is also a good idea. Credit utilization should be kept below 30%.

Not paying bills on-time can adversely impact your credit score

One of the biggest influences on your credit score is whether you pay your bills on time. Even though late payments don't have a major impact on credit scores, it can cause problems. There are many ways to improve your credit score, and avoid paying late payments. Learn more about how late payments can impact your credit score. Access your credit report online for free.

Paying your credit card on time is crucial. Your credit score can be negatively affected by even one late payment. The more late payments you make, the more likely your score will suffer. A late payment will be noted on your credit reports for seven-years. This means you are more likely pay higher interest if your late payments continue.


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Collecting or paying off collection charges

Paying off collection accounts and charge-offs can help you keep your credit score high. But it's not an easy task. Get caught up on past payments first. Once you have gotten caught up on past due payments, you can plan for your future payments. The impact of these late payments will gradually diminish over time, and you can raise your score.


When possible, settle the debt with the original lender. Request a confirmation from the original lender confirming that the debt was paid. This will appear on your credit report as a paid charge-off, which lenders generally view more favorably than an unpaid account. Likewise, if you're paying off a debt to be sold to a collections agency, you should check the details of the final payment letter to ensure that it doesn't appear on your report as a charge-off.

Keeping your credit utilization ratio low

Keep your credit utilization ratio low to increase your credit score. NerdWallet, a free service that tracks your credit usage, can help you determine how much. Ideally, you should keep this number below 30 percent. This ratio can change with each purchase.

Your credit utilization rate is calculated by subtracting the amount of credit that you have from the total outstanding balances in your accounts. This number is not exact, but it can be a significant indicator of your overall score. Low credit utilization will enable you to get credit when you need it, and help you achieve your money management goals.


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Avoiding asking difficult questions

A good credit score is maintained by avoiding hard inquiries. When you apply for a new credit card or make a large financial commitment, a lender will pull your credit report. Although this may seem like a harmless action, it can cause serious damage to your credit score. Hard inquiries are listed on your credit file and can impact your score by several percentage points.

There are many ways to avoid being asked for hard questions. The easiest way to avoid getting too many credit-card inquiries is not to apply for them all. Making too many applications will cause too many inquiries, which will lower your credit score. Consider whether or not you need a new card and if you are able to manage your existing credit better.



 



How to keep a high credit score