Need to fix your credit and boost your credit score?

Well, you’re not alone…

Still, it is not necessarily an easy thing to do. The best way to describe a credit score is like a driving record. It takes years of past behavior into account and not just your present actions.

Today, we are listing 4 great ways to help maintain a healthy credit score.

1.  Keep an eye on your credit card balances

What most people don't know is that a big factor in their credit score revolves around credit card balances. The way this is looked at in determining your credit score is taking the revolving credit limits that you have versus the current outstanding balances. The smaller the percentage balance to your overall credit limit is the better your credit score will be.

The optimum percentage is 30% or lower. In order to boost your score you should pay down your balances and keep them low.

2. Old debt on your credit report is not all bad

This may sound counter intuitive, but some old debt is actually very good and an important factor in a good credit score.

Where negative items are bad for your credit score, debt effectively paid off over time is another thing. Old debt paid on-time shows lenders that you have a history of responsibly handling debt, and that history is a strong indicator that you will be able to manage debt effectively again in the future. Creditors look upon this favorably, and consumers with a good history of managing debt are rewarded with higher credit scores.

3. Pay your bills on time

We all know that buying a home or a car usually takes a large initial down payment. And that sum may potentially compromise a lot of bills over time - which sadly, could start to get paid late. Without a doubt, starting to pay your bills late is one of the most negative signals you can send to potential lenders. And as a consequence there will likely be a pretty immediate drop in your credit score.

That is why paying your bills on time should never be compromised by a major investment. It’s important to plan for that major investment and the expense of continuing to pay your ongoing bills. Both need to be factored into your calculation on whether or not you can afford that large purchase.

4. Know in advance

If you are getting ready for a big purchase that will require a loan, a home or a car, make sure to obtain a copy of your credit report and credit scores a least a couple of months in advance. This will grade you on many of the same criteria used for determining the loan, and serve as a great indicator on how well you are managing your credit. Also, it will provide you with a kind of roadmap on how you need to improve your credit score.

 So, make sure to regularly keep up with your credit reports and credit scores to find and correct errors well in advance of your need for a large purchase loan!

Conclusion

How do you start making the most of your credit score?

Follow the basic good money management practices covered above, and stay on top of your credit report.  You can order your credit report for free once a year.  So be sure to look at it at least annually – it’s free, and your credit score will thank you!