Top Ways to Maintain Good Credit

A person’s credit score is an all-important number that is responsible for dictating the terms of a loan or other items. The biggest reason to improve one’s credit score is to get the best interest rate on a loan as well as other perks which only go to those with the highest credit scores. People with high credit scores are deemed to be most likely to repay a loan in the future, as well as the most reliable while the loan is actually in repayment. Credit score improvement doesn’t happen overnight, but solid gains can be made in a few months.

The first thing to do is keep debt distribution below 30% of the total credit limit. So if you have a $10,000 limit on your credit card, keep the card’s balance below $3,000. When a person goes over the 30% threshold, there is likely to be a negative effect on the credit score. Paying down some of the debt on a credit card to the point that it is back under the threshold will raise a credit score.

Next, keep your credit history long. Closing the oldest credit accounts eliminates valuable history on a credit report. Keeping a credit history report complete and with all of its old good credit will keep a credit score high.

Avoid new credit. Whenever a potential creditor pulls a person’s file, an inquiry is filed. Too many inquiries in a two year period can affect a credit score negatively. As a general rule of thumb, don’t ask for new credit while trying to improve one’s credit score.

Pay off debts as they become due or earlier. If there is a credit card debt with a very high interest rate, considering a consolidation or family member loan. As long as more debt is not accumulated, a person is likely to be ok.

The most important thing is paying on time. The easiest and best way to keep a credit score high is pay bills on time. The majority of creditors will not report late payments at 30 days, but will at 60 or 90 days. If there are late payments in your past, do not worry. With time, these will lessen in influence over your credit score in general.

Contact a Boston Bankruptcy Lawyer

If you are facing a mountain of debt and are considering filing for bankruptcy, contact the Boston bankruptcy lawyers of Joshua Spirn & Associates at 1-800-975-5346 to determine which form is best for you.