How to Maintain a Good Credit Score

Now that you know how to look up your credit report (click here if you missed it), it’s time to learn how to achieve that credit score you need for a new home and make it happen! As long as you consistently pay your debts on time, and stay smart about your spending, you should be able to apply for a mortgage in no time!


1. Pay Your Bills and Credit Cards on Time

The biggest thing your lender will look at is when you pay your debts off. Make sure to consistently pay your bills every month on time to show that you are a responsible and trustworthy borrower. Even one late payment could make you look bad, so be sure to be on top of your accounts!


2. Pay the Full Amount Owed

Every debt statement you get will give you a minimum amount due. If it’s all you can afford, it is okay to pay that, but the more you pay off at a time, the quicker the debt will go away. You will also end up paying a lot more in interest if you pay in small increments. Therefore, if possible, pay off the full amount you owe every month, and you will end up paying less in the long run.


3. Don’t Open Too Many Credit Lines

Having too many credit lines open will make you look like an unreliable borrower, even though some of the incentives for opening new lines can be enticing. Keeping just a few credit cards is also easier to manage and pay off. After two or three credit cards, especially for first-time home buyers, the lender may worry that if you suddenly max out all of your cards you won’t be able to pay your other debts.


4. Diversify Your Credit Lines

Having just loans or having just credit cards is a red flag for many lenders. Mixing up both your credit cards and your loans will make for a healthier credit report. It’s okay to have a car loan and a few student loans, as long as you make sure you balance that with a credit card or two. This doesn’t mean you need to max out all of your credit cards every month, but it’s good for anyone to maintain a few lines of credit.


5. Keep Your Cards for a While

The best way to be a responsible and reliable borrower is to have a long credit history where you have paid all of your debts on time. The longer you can manage a credit card, the more trust your lender will have in you. You are proving that the money you want to borrow will be paid back on time every month in full, just as it has been on your other credit lines.


6. Don’t Use Your Card for Everything

Using your credit cards too much will make it look like you are too dependent on your credit lines, so try to pay for things with them in moderation. Avoid using your credit cards to pay off bills and loans, and make sure if you use your cards on little things you don’t go over your credit limit when they add up. It is recommended that you only use about 30% or less of your available credit every month to achieve a trustworthy and healthy credit score.