Tips on how to maintain an excellent credit score

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If you’re applying for loans or credit cards, then you’ll need to have a good credit score. This score shows lenders how worthy you are of borrowing money and using their credit. An excellent score means you clearly take care of your finances and can be trusted to borrow money, and pay it back on time. There are also benefits that come with a good credit score, such as being able to get lower interest rates on your loans/credit cards and having the ability to apply for more credit as well.

So, how do you maintain an excellent credit score? You’ll be pleased to know that most of the things you need to do are very straightforward. Below, we’ve listed the top things to try if you want a high score forever:

Make Payments On Time

Possibly the simplest thing you can do to maintain a positive score is to make all your payments on time. This doesn’t just mean paying your creditors on time, it refers to any bills you have as well. So, if you’re always late paying your phone bill, then it reflects poorly on your credit score. As such, an easy way you can help make payments on time is with direct debits. Set them up so you pay things automatically without having to remember. You’re deemed to be more trustworthy if you can prove that you keep up with regular payments and never miss them.

Keep Your Credit Card Balances As Low As Possible

One of the key factors in determining a credit score is how much credit you have vs how much you use. In essence, if you have £2000 worth of available credit, and you’re using all £2000 of it, then this won’t give you a good score. Generally speaking, you should try and achieve a credit utilisation rate of 30% or lower. This just means you use no more than 30% of the credit you have access to. The best way to do this is by keeping your credit card balances as low as possible. Stop allowing your balance to roll over to the next month by making the minimum payments. Pay off your credit card bill in full so you can keep the balances low across the board. What’s more, it can also help your score if you have multiple credit cards but have zero balances on the majority of them. It shows you’re in control of your borrowing and don’t depend on credit all the time.

Lower Your Debts

Ideally, you should try and get rid of as much debt as you can before applying for any form of credit. If you’re heavily in debt, then lenders are hesitant to let you borrow their money. You will have a much worse credit score as it shows you’re incapable of borrowing money and paying it back on time. But, if you focus on lowering your debts and owing as little as possible, then you can maintain an excellent score. Sometimes, it also makes sense to use a debt consolidation loan to try and pay off multiple debts and consolidate them into one loan. The number of people you owe money will also impact your credit score. To keep it excellent, make sure you aren’t in debt to loads of people.

Keep Checking Your Credit Report

Sometimes, the cause of a bad credit score could have nothing to do with you. It’s possible for mistakes to be made on your credit file, or even for people to assume your identity and use your cards. When things like this happen, it will lead to your score dropping as there’s no way for credit score calculating companies to see if it’s actually you or not. So, check your credit report regularly to manage the activity on there and see if it matches up to your bank statements. If you spot fraudulent activity, then you need to inform your bank and then dispute the inaccuracy by sending a letter to the main credit bureaus in the UK. Likewise, always keep an eye out for wrong details – such as your address or name – which may have changed over time. Even something as simple as this can cause your score to drop. So, by staying updated, you can prevent any of these issues and maintain your excellent rating.

Achieving an excellent credit score can take a fair few years as you slowly build up your creditworthiness. However, once you’ve got an excellent score, it’s surprisingly easy to maintain it. Follow the advice listed above, and you’ll do a lot to ensure your score doesn’t drop.