How to Maintain Strong Creidit

It is easier to avoid credit problems than it is to come back from a credit mistake.

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Why It Matters

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Strong credit means lower interest rates, lower down payments, and more money for retirement!

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What You Need to Know

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There are five factors that make up your FICO score. Here are some tips on how to improve your score in each factor, resulting in a better score overall.

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Payment History Tips:

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• Make timely payments. One 30-day late payment can drop your score by up to 100 points instantly.
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• If your credit becomes unmanageable, contact your creditors to negotiate other arrangements or seek credit counseling immediately. Once you get it under control, your score will improve over time
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Amounts Owed Tips

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• In order to be rated in this factor which is 30% of your score, you must have open credit card.
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• Keep your credit card balances below 30% of their limit on statement date.
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• Don’t close unused credit card accounts. It’s better to let them become inactive.
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Length of Credit History Tips

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• Make sure all of your open accounts are reporting to all three credit bureaus.
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• Don’t open a lot of new accounts at once. That strategy will lower your average account age.
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Types of Credit Used Tips

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• Stay away from department store cards. They are considered third-party credit and when trying to rebuild or establish credit, you should apply for major credit cards ONLY.
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• A good mix of credit would be 2-3 credit cards and an installment (i.e. an auto or mortgage loan).
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New Credit Tips

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• Shop for the best rate in a focused period of time. If several mortgage or auto inquiries occur in a short amount of time, they are counted as a single hard inquiry.
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• If you see any unauthorized inquires reporting on your credit reports, dispute those items immediately.
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