There are many important numbers that people should be aware of. From ATM pins to emergency telephone numbers, few are more important than a credit score. A person's credit rating can make the difference between being able to achieve important life milestones or not, such as buying a house. By following some tips for maintaining a good credit score, anyone can reach their financial goals.
One of the easiest ways to maintain a good score is to stay on top of it. Everyone should check their credit score at least annually to make sure that it is accurate and to get an early hold on anything that may present a problem. Remember that everyone is entitled to a free report from all three major credit bureaus every twelve months.
Some people think that the best way to have a good credit score is to pay for everything in cash and not incur any debt at all. What they may not realize is that someone with no credit at all may as well have bad credit as far as creditors are concerned. At some point, there will bound to be something that cannot be paid for in cash, such as buying a home, so it is good to have at least one credit card, use it occasionally and pay it off in full at the end of the month.
When people pay off a credit card, they are often tempted to cancel it. Actually, leaving it open with a zero balance can have a very positive effect on an overall credit score, especially if the account had been open for a long time. Fifteen percent of a credit score is based on the length of the history and thirty percent is based on the debt to credit ratio, which is improved when a card is left open with no balance.
One of the most important tips for maintaining a good credit score is always knowing what exactly your credit score is. Remember that no credit is just as damaging as bad credit and that it is sometimes beneficial to leave a card open after it has been paid off. By following these tips, anyone can maintain a high score.