Building and maintaining a good credit rating can be a difficult task to accomplish. However, it only takes a single financial mistake, and your good credit rating will be no more. A good credit rating means lower interest rates when you apply for a loan which translates to more cash in your bank account. It is also easier for you to get approved for loans and credit when you have a good credit score. Luckily, there are lots of things that you can do to maintain the good credit score that you’ve worked so hard to build.
Manage Your Credit
Keeping your debt balances low will help boost and maintain your good credit score. Make sure that you keep your debt utilization as low as possible. Your debt utilization is a ratio showing the available amount of credit that you can access vs. what you have used. Make sure that your debt utilization doesn’t exceed 30% of your available credit limit. If you are carrying a balance on any of your credit cards, make sure that you come up with a plan to pay off as soon as possible. Always keep track of your spending and have an emergency fund to ensure that you don’t have to borrow money every time a financial emergency comes up.
Check Your Credit Report for Errors and Fraud Regularly
Find some time and look at your full credit report and not just the credit score. Visit any of the two credit bureaus- Equifax Canada or Transunion Canada for your annual credit report and look at the various items indicated in your report. Make sure that you dispute your credit report if you discover any incorrect or inconsistent information.
Treat All Your Debts Equally When It Comes to Paying
Keep in mind that your credit rating usually takes into account both your trade line and revolving debt. Other installment loans such as mortgage and no credit check loan will also determine the value of your credit score. Therefore, it is always good to treat all of your debts equal when you want to maintain an excellent credit rating. For instance, you shouldn’t fail to prioritize your line of credit since it attracts a lower interest rate. Having a debt balance on any of your credit cards all the time can lower your credit rating and negatively affect your chances of getting approved for low-interest loans.
Pay Your Bills on Time, Always
Did you know that your bill payment history accounts for at least 35% of your credit score? Therefore, if you want to maintain a good credit rating, you need to develop a habit of paying all of your bills on time all the time. If you’ve been missing your bill payments, do all you can to get current and stay current if you don’t want to hurt your credit rating. Each on-time bill payment updates positive information to your credit report.