Having an excellent credit score is very useful. The following are some tips on how to maintain a superb credit score.
Open Credit Accounts When You Do Not Need Them
If you don’t have any credit accounts, you will have a low score. The best time to open them is when you do not need them. Keep a small balance on them and pay it all off at the end of each month to avoid paying interest.
Charge Up To Half The Credit Limit Then Pay It All Back Within A Few Months
If you must use a credit line, only use half of it and pay it back quickly.
Buy Big Ticket Items With A Credit Card For Cash Back And Points
Even if you can pay cash for a big ticket item, you may find it beneficial to buy it with a card that gives a reward for making a purchase like cash back or rewards points. Then pay off the balance as quickly as you can.
Ask For An Increased Credit Line
For credit accounts that you have been paying on time, call the customer service department and tell them you are thinking about buying something that is slightly above your credit limit. Ask them if they can extend the limit. This usually works even if you do not actually buy something.
You can attempt to raise your credit limit this way about once per year. As you increase your available credit capacity while maintaining all accounts in a “paid as agreed” status, your credit score should go up.
Move Credit Balances To A New Card With Zero Interest
Many credit card companies offer a zero-interest period for transfers of credit card balances from another card. After doing this, transfer this balance, once again, to another card that has a similar offer before the zero-interest period expires.
Close Old Accounts When New Ones Are Open
Having too many credit card accounts can lower your score. Keep about half a dozen cards. Close the ones that you transferred the balance from to zero interest cards.
Use Automatic Payments To Make Sure Bills Are Paid On Time
Never miss a payment or pay late. You may want to use automatic bill payment systems to make sure you never let a bill slip by.
Monitor Credit Card Activity For Unauthorized Use
Monitor all credit card activity in real time. Immediately take action if you notice an unauthorized charge. Monitor your credit history file on the three credit bureau services of Equifax, Experian, and Transunion.
Your trusted home mortgage professional can provide you with additional guidelines to improve and maintain your credit while preparing to purchase or refinance your home. Be sure to contact this valuable resource if you have any questions.
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About the Author:
Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.