Here are some ways to maintain a good credit score. Do not apply for new credit lines and pay off all collections and charge-offs. Credit cards should be kept open in order to diversify credit. This will prevent you from building up a large debt load and increase your credit score.
Do not apply for credit extension
Avoiding new credit card applications is the best strategy for credit cards. Because a new credit application will affect your credit score, Additionally, you should not apply to for new lines of credit if your debt is already high. Instead, you should focus on paying down your existing credit cards and saving for a major purchase. Good credit can help you get the best rates for loans, credit cards, or rental apartments.
Diversify Credit Mix
The ideal mix of revolving and instalment credit is optimal. It is easiest to use revolving credits by opening a credit card and paying it off on time each month. Also, only charge what you can afford each month to prevent interest. If you don't have an installment loan yet, consider taking out a small personal loan to demonstrate that you are capable of managing both types of credit.
Charge-offs and collection accounts must be paid
While it can be difficult to get rid off charge-offs or collection accounts, it is definitely worth trying. Smart planning can speed up the process, even though it will take some time.
Credit cards are not closed
The best way to maintain a high credit score is to maintain at least one credit card account. You need to use your card regularly and not just keep it open because it is convenient. Multiple accounts can complicate tracking and raise fraud risk. Experts recommend keeping all accounts open. But it is best to keep one card.
Avoid hard inquiries
Credit scores can be lower if you apply for too many credit cards and loans within a short period. Even though a single inquiry does not impact your credit score it is better to avoid multiple inquiries within a year before applying any loan or mortgage. Hard inquiries are kept on your credit report for one-year and remain there for two years. Keep in mind that not all credit decisions are based on your score; lenders may consider other factors.
Don't close your credit card if you have balances on another card
To maintain a high credit score, it's important to avoid closing credit cards while you have balances on another card. Because credit scores are dependent on the reporting activity of your accounts, you need to avoid closing credit cards while your balances are still on another card. Without paying off your card, you risk being "credit invisible". However, some credit card companies will waive annual fees or convert fee cards into no-fee cards if you pay them off in a reasonable timeframe.