Do Right by Your Credit and it Will Do Right by You
The Credit Score...
There is a lot of importance placed on the credit score, and there's plenty of reasons for that. I argue, however, that one should not be obsessed with their credit score. As long as you're managing your money like a boss, there is nothing to worry about. The score(s) tend to fluctuate and vary depending on where you look and when you check. Often times there is no need to worry. While the image displayed above shows an increase by 9 points, 8 days later it showed a 2 point drop. It's important no get worked up over these minor changes.
Good financial habits such as those below often lead to higher scores:
- Keeping Balances Low - This means you're not carrying large balances from month to month. You're paying bills in full or paying more than just the minimum.
- Credit Used - The debt load you carry can hurt your score. Just because you have a $10,000 credit line, does not mean you should be using it all. Try to keep that balance to a minimum. The more available credit you have, the better.
- On-Time Payments - Paying your bills on time matters. Payment history can really impact a score positively or negatively.
- Oldest Credit Line/Length of Credit History- Having accounts in good standing for long periods of time has a positive impact on one's score. Be careful when opening new accounts and only do so when necessary. New credit opened can impact one's score negatively.
In summary, keep credit balances low, try not to use high percentages of your available credit, pay your bills on time, and be very selective when opening new accounts. Managing your money like a boss is about practicing good financial habits and spending your money wisely. If you're committed to doing the right thing your credit score will reflect that.
Focus on good habits and you'll soon have a good score!