People with excellent credit score have formed specific habits. They adhere to these habits religiously. Making a few adjustments in your life is all that it takes to have credit scores that make you a proud person. Some people end up damaging their credit scores without even realizing it. Some honest and sincere mistakes you make could damage your credit scores. That’s why you need to know the best-kept credit secret of all. The secret is to develop the right habits, which include the following:
Paying bills on time
First, develop a habit of paying all your bills and loans on time. The last thing you need to be doing a lot is defaulting on payments and repayments. Nothing shows your seriousness at improving your credit scores better than a willingness to settle all your financial obligations on time. According to The Street, Inc the average credit scores in the US is on the increase. If you want to increase yours too, paying your bills and repaying loans on time should never be issues that you struggle with.
Minimize using available credit
The second good habit that you must develop is minimizing your usage of the available credit. Based on a study conducted by Fox Business Network, your credit scores suffer when you keep using too much of the credit that’s available to you. Simply because you have access to too much credit doesn’t mean you should gobble it all up. If anything, you should limit yourself to using not more than 30 percent of what’s available. You should do this with each individual credit card that you have. Apply the rule on the cumulative limits of every card that you have.
Maintain low credit balances
Maintaining low credit balances is a great habit to form as you embark on the journey of making your credit scores more admirable than embarrassing. A close study of the people with outstanding credit is they all maintain low balances. Furthermore, such individuals shun the idea of paying interest simply by making a habit of paying their balances in full each month. In fact, Equifax says that paying the entire credit card balance in full when it’s due is a goal worth having as you continue working hard to see your credit score improve significantly.
Build long credit history
A long credit history is great. It’s hard to push your credit score to 800 or more if your average account history isn’t anywhere near 11 years. The old accounts that you have kept inactive are a goldmine. The last thing you should do is close such accounts. In fact, closing such accounts only hurts your credit scores. It takes some time to build a healthy credit score. A long credit history shows how you have performed regarding keeping pace with your bills and spending or living within your means. Long credit history proves that you’re responsible, prudent and mature.
Therefore, begin working on yourself. Use whatever you can get to develop the habits mentioned here to take your credit scores to the next level. Remember, it’s rewarding to pay your bills and loans on time. Minimizing available credit usage is worth it in the long run. Keeping your credit balances low is great news for your credit scores. Keeping the old and inactive accounts alive might seem such a worthless thing to do until you learn the benefit they have on your credit score. This is the best kept credit secret that you must know and apply in your life.