9 Secret Habits for a High Credit Score

You’re in the process of building your credit score. You’ve made a credit plan and you’re sticking to it. That’s fantastic!

But once you get where you want to be, how do you maintain that good (or great!) credit score? We’ve put together nine financial tips from the experts:

1. Review your credit report regularly
   You are entitled to one free credit report from each of the three main reporting agencies—Experian, Equifax and TransUnion—each year. This is a perfect opportunity to see your reported activity, learn what a credit report looks like and identify potential areas of improvement. Visit AnnualCreditReport.com to download your free report from any or all three of the credit reporting agencies. In addition, be aware of actions that can hurt your credit score, like closing an unused credit card account, collections and hard inquiries.




2. Be diligent about fixing errors
   Mistakes happen. Your credit card company and the major credit reporting bureaus are all run by people, and people sometimes make mistakes. If you aren't regularly checking your credit report, you may not notice an error or you may not notice it until after it has already kept you from getting an auto loan.

    

   If you find an error on your credit report, contact the bureau that generated the report as quickly as possible. They can sometimes see the problem right away without needing anything further from you. However, you may have to provide supporting documentation to dispute the information. Find out exactly what is required and get to work compiling it. Be sure to make a copy of all documents before you submit your dispute and follow up at the appropriate times.




3. Pay on time, every time
   Payment history is a huge chunk of your credit score (about 35%). Utilize payment tools to help you stay on track—like setting up automatic payments or using an app or signing up for email and text alerts to keep track of your due dates.




4. Minimize the effects of late payments
   If you do miss a payment, don't wait any longer than you already have to pay it. You will likely have to pay a late fee, but most creditors don't report a late payment unless it's 30 days late or more. Even if, for some reason, it does show up on your credit report, a payment that is only a few days late, or even 30 days late, looks much better than one that is 60 or 90 days late.




5. Live within your means and don’t max out your credit
   Our best recommendation for credit cards is to charge only what you can afford to pay off each month. Part of your credit score is determined by how much credit you are using. The more you use of your credit limit each month, or the higher your credit utilization ratio is, the more harmful it is to your credit score.
   
   If you already have existing credit card or loan balances, a good rule of thumb is the 20/10 rule. First, keep your total credit card and loan debt (excluding mortgages) to no more than 20% of your total annual income (after taxes). Second, don’t spend more than 10% of your monthly income (after taxes) on credit card and loan payments each month (excluding mortgages).
   
   If you use your card regularly, it's essential to pay more than the minimum payment. Keep in mind that your credit score can take a negative hit if your balance and credit utilization increase each month. Our recommendation? Reduce your credit card balance—the faster, the better.

6. Keep old lines of credit open
   Even if you’ve paid a credit card off and moved on to a new credit card, keep your old accounts open—charge something on it every now and then and immediately pay it off. About 15% of your FICO^® Score is based on your credit history, so the longevity of older accounts helps boost your credit score, especially if you have accounts that are 2-4 years old and older.




7. Avoid applying for new credit if possible
   Just because you have a great credit score doesn’t mean you should open more credit cards! Don’t apply for new credit unless it’s absolutely necessary—each new application requires a hard inquiry to your report that will affect your credit score negatively. You may also get dinged for using too many credit cards.




8. Have the right mix of credit
   Approximately 10% of your credit score is computed based on the mix of credit you have. If you want to maintain a good or great credit score, you should keep an evenly-balanced mix of mortgage debt, installment debt and revolving credit accounts. Borrowing from a handful of lenders and paying each off on time (or sooner) not only shows other lenders and creditors that you are a responsible borrower, but it also helps you build a high score. Just don't borrow too much money all at once or borrow too often. As you get older and your life progresses, apply for new types of loans and credit when the timing is right and it makes financial sense.




9. Keep the lines of communication open
   If something happens to your income or overall financial situation, don’t be afraid to call your creditors. You’ll often be able to make payment arrangements that can help protect your good credit rating.

If you want to have and maintain a high credit score, you have to be patient, smart with your money and develop good long-term credit habits over your lifetime. Check out our Learning Center for more financial habits and tips on how to be good with money and keep your financial house in order so you can have not only a better financial future, but a better financial present, too.