Credit is a luxury that only people in developed countries have access to and maintaining a good credit score is something that disciplines people get access to. A credit score is simply a measure of how you have been settling your credits. All credit companies have access to a public database where they update the records of the people they give credit to. The various credit companies then use this information to determine how they allocate funds to those that borrow, so if for any reason you have a bad credit score from one company, others will avoid giving you credit. Think of it as a way of credit companies having each other’s back.
In this article, we will look at a brief list of the ways that you can maintain a good credit score and get to enjoy the excellent services credit companies offer.
How to keep a good credit score
Minimize on your credit spending
The idea here is to keep your credit balances low. The way it works is that the more your credit balance, the worse your credit score gets. There are very many things that one can do to minimize their spending, but the best of them all is to make sure that you spend your credit only when necessary. This will ensure that when you finally get debited, you can easily pay for the basic needs you used your credit for. This ensures that your balance stays low and credit score goes up.
Pay all your bills on time
One thing about bills is that when you do not pay them in time, they get reported to credit bureaus. No matter the type of bill, be it water, gas, heating or even a library fine, make sure to pay them in due time. Many companies will forward your unpaid bills to the authorities who in turn will include them in your credit reports. This increases your credit balance and eventually will lower your credit score and hinder your borrowing ability.
Manage your debts
Many people blindly spend their credit cards without ever caring to watch their debt management. When the money spent is left to accumulate, it makes it harder to pay in future. If possible, make sure you settle all your debts whenever possible, no matter how small. This will dramatically reduce your credit score and eventually boost your credit score, allowing you to borrow more, especially in your time of need.