A good credit is essential for a number of aspects of your life, ranging from the interest rate on a car loan or credit card to background checks for employment. Poor credit can be incredibly expensive, which can be costly in regards to higher interest rates over the course of a home loan. Fortunately, with proper care and attention paid to your finances, it is possible to maintain a good credit rating.
Here are six factors that could affect your credit score:
- Not paying your bills on time – Bills not paid within 30 days can be reported to
the credit bureaus. - Utilizing all of your available credit on credit cards – It is important to not max
out your credit cards without a plan to pay them off. - Not having a diverse mix of credit – Having different types of credit, such as
car loans and revolving credit, could help improve your score. - Applying for too much credit – Multiple applications for credit cards in a short
period of time can be a bad sign. - Not using credit at all – You must show that you can responsibly use and
manage credit in order to maintain a good score. - Closing credit cards – Keeping long-term accounts open is important, as
closing them removes the positive history from your report.
Good credit is especially essential when searching for a new home or applying for a home loan. Having a good credit score can make the difference between having your loan accepted and being declined. Poor credit can be prevented if you pay attention to the above mentioned criteria, so be sure to stay on top of your finances to ensure
success.
