Many people do not think twice about their credit score. But when it comes to getting a loan and you are declined or you find out that you are paying a high interest rate, you will realize the importance of protecting your credit score. Your credit score, often called your FICO score, is what the lending industry uses to decide if you are credit worthy and how high of a risk you are to a lender.
There are things you can do that will protect your credit score and avoiding these measures can cause your credit score to drop, putting you at risk for credit denial and high interest rates. These are all things you can do on your own and will not cost you any money. Any company that says they can repair credit probably is not going to do anything you could not do for yourself and they will charge you for their services.
With that being said, the easiest you can do for yourself is show a history of making your payments on time. Nothing shows credit worthiness more to a lender than years of on-time payments. Nothing will zap your credit score faster than a history of making your payments late. So, do whatever it takes to get your payments to your lenders on time. Many lenders have online bill payment as an option. Most of these sites will tell you exactly when your payments are due and when they have to be received in order to be on time. Many banks also have the option to setup online bill payment. Some of these can even be setup to make the payment for the same amount on the same date without ever having to touch it again.
Keeping your credit cards below their credit limits is another thing that will help your credit score. The experts say that you should not have a balance that is no more than 30% of your credit limit. Even if you pay your balance in full each month you should try to stay well below your credit limit. Your debt to income ratio plays a big part in keeping a high FICO score. Living below your means is the best thing you can do to ensure that you have a low debt to income ratio. Living below your means should be part of everyone’s debt management plan.
Inaccurate information on your credit report is another thing that will hurt your credit score. You should pull your credit report once a year and check it for accuracy. If there is information on it that is inaccurate you can go on the website of the credit reporting organization and fill out a form for having the information revised and removed. It is your credit and only you can keep it in good shape. That includes making sure that it is accurate, that your payments are received by the due date and living below your means to ensure that you stay well below your credit limits. It is much easier to protect a good credit score than to try and get it back.