Having good or excellent credit can help you in a multitude of ways. For example, it can aid you in accessing housing, utilities, insurance, and much more. Check out this list of six tips for maintaining a healthy credit score.

1. Make Payments on Time

Note that your payment history accounts for 35% of your credit score. You want to make all your payments promptly. Try to make the minimum payment or more on all your lines of credit. Missed payments can negatively impact your score. Some have experienced a 100-point drop in their score because they missed several payments. One of the best ways you can make sure you do not miss any of your bills is to authorize automatic payments. You can also allow your credit card company to send you bill alerts via text or email. Paying your credit card bills on time will help you maintain a healthy score.

2. Keep Your Cards for a Long Time

The length of your credit history makes up 15% of your score. This means that you should not cancel a credit card right after you have opened it. You want to keep each card for a substantial amount of time. Lenders who analyze your credit information want to see that you have built a viable rapport with your creditors. They will not be able to do this if you cancel your cards a short period of time after you received them. Moreover, if you cancel a card, it can have an immediate negative impact on your score. Say you have two cards, and each of them has a limit of $1000. You have an $800 balance on credit card number one and a $600 balance on credit card number two. This means that your total credit card utilization is 70% (i.e., ($800 + $600)/($1000 +$1000) = 0.7). If you close the account for credit card number two, your credit card utilization will jump to 80%, and your score will drop significantly. By refraining from canceling your cards abruptly, you can build a long credit history.

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3. Co-Sign for Things Cautiously

You may have people in your life who want you to co-sign loans or cards for them. Choose who you co-sign for carefully. If you know people that are not very good with money, miss their bill payments and pay their bills late, you should refrain from co-signing for them. Their lack of good money management could affect your score if you do end up co-signing for them, and information about their missed or late payments will show up on your credit report. If you decide to co-sign for somebody, make sure it is a person whom you know is financially responsible. Co-signing for someone can impact your score, so proceed with caution.

4. Get New Lines of Credit Sparingly

It is worth mentioning that new credit represents 10% of your score. This means that you should not obtain new lines of credit haphazardly. When you apply for a new card, student loan, car loan, or mortgage, lenders will conduct what is called a hard credit inquiry. Such an inquiry can decrease your score by a few points and remain on your report for two years. If you aim to acquire multiple lines of credit, space out your attempts. Submitting one or two applications every year is much better than submitting several applications every couple of months. Manage your acquisition of new credit wisely.

Take good care of your credit score so that you can maintain a robust one. While doing so, be sure to utilize the resources you have at your disposal. 

5. Keep Low Credit Balance

The most important thing is to keep a low balance and a high credit limit to maintain a healthy credit utilization rate (CUR). Credit reporting agencies use this credit utilization ratio component to measure your credit score. It compares your available credit and the amount of credit you’ve used together. 

Alternatively, your credit utilization ratio plays an important role during FICO credit score calculation.  It can increase your score upto 30%. According to the experts, keeping your credit utilization ratio around 10% will benefit your score. 

Hence, keeping a low credit utilization ratio can help to maintain a healthy credit score. You can also open a new credit card to maintain a certain card’s credit limit. But don’t close the old card while opening a new one. 

6. Use Credit Monitoring Service

Credit monitoring service gives security protection to your card. It monitors the credit history and notifies you if there’re any changes made to your credit report. Credit monitoring service helps maintain a good score by monitoring your card every time and preventing identity threats. 

Despite its benefits, there’re some limits these services offer. So, check the pros and cons before signing up for a program.