Ah, the credit score. That mystical number that seems to change for no apparent reason and determines whether we’ll get a good or a garbage interest rate on our mortgage or whether we can afford to upgrade our second-hand car.
Here at Brigit, we’re so invested in helping you build a robust credit score that we created an entire tool in our app dedicated JUST to that. It’s called Credit Builder, it’s pretty nifty (if we do say so ourselves), and it helps you build your credit (and savings) with no hidden fees.
If you’ve been using Credit Builder and your score is no longer in the sketchy part of town – or if you’re one of the financially-savvy millennials who had a good one to begin with – congrats! You’ve done the hard part. Now you just need to hang on to it. Which might be a bit more complicated than you had thought. You can’t just get a good score, put it away in your kitchen drawer and forget about it like that old charger from the iPhone 6. There are things you have to do to maintain it.
PAY YOUR BILLS ON TIME
THE. MOST. IMPORTANT. THING. you can do is to pay your bills on time. It sounds so simple it’s ridiculous, but missing a bill payment can ding your credit score (not to mention rack up fees on late payment). You can make sure you never miss a payment deadline by:
- setting up automatic bill pay (assuming you know you won’t fall short when the due date rolls around)
- setting reminders in your phone a few days before each due date, so you can manually pay the bills
- checking your bills forecast in the Brigit app, so it can do the hard work for you
STAY WELL BELOW YOUR CREDIT LIMIT
The second most important thing you can do to maintain a good credit score is to stay below your “credit utilization limit.” What does this mean? Well, you’ll have a limit to the total amount you are allowed to “borrow” (aka spend) on your credit cards, and that amount will be spread out over all your credit cards. If you have a home equity line of credit or personal line of credit, those will factor into your credit limit too.
Experts say that you should try to stay below 30 percent of your credit limit. So if you can spend a maximum of $100 on your credit card (your credit limit), that means you shouldn’t have a balance of more than $30.
This 30 percent rate isn’t set in stone, and it will naturally vary a little as and when you make big purchases, but your credit utilization is the second-biggest factor to influence your credit score, so it’s a good thing to keep your eye on.
Brigit can help you do that with its credit-monitoring feature that keeps track of hard inquiries on your credit report. Brigit Plus members can access this through the Credit tab in the app
DON’T SHUT DOWN OLD CREDIT CARDS.
This one may seem counterintuitive. After all, why keep an old card if you’re not really using it?
Fair point, but one of the things that influences credit score is how much of a track record you have managing your debt. So if you have an older credit card that shows that you have a history of paying your bills on time that stretches back a few years, and a new one that only has history for a few months, the old one is doing the heavy lifting to help your credit score stay perky.
ONLY APPLY FOR NEW CREDIT AS AND WHEN YOU NEED IT.
This one’s easy. Too many credit inquiries in a short period of time hurts your score, because it might seem as though your financial circumstances have changed recently and now you need a lot more credit than you previously did.
FIX ERRORS IN YOUR CREDIT REPORT
Sometimes errors creep into your credit report, and that can negatively affect the score you worked so hard to build.
Keep an eye out for any mistakes and dispute any that you find.
Where to submit a dispute to the three major credit bureaus:
That’s it! Stay on top of these five things and you’ll maintain your credit score like a champ.