Here Are 6 Common Habits Of People With Great Credit
Reported by Liku Zelleke
Achieving a great credit score isn’t something that simply happens overnight – you need to put plenty of effort into it, plan it, and then stick it out. It is about responsibility, better money management, and making financially stable decisions.
But, above all, says Nell Casey, there are 6 habits people with great credit scores have in common. Writing in The Network Journal, a platform for Black professionals and small business news, she lists them as:
- Checking Credit Scores Regularly – no one can correct their credit scores without knowing how bad they are. Also, regular checks help in spotting and correcting any errors that may need to be curbed before they cause any serious damage.
- Paying Bills on Time – Casey says, “Arguably, the most important factor in your credit score is your payment history, which accounts for 35 percent of your FICO score.” This means you should have a system in place that will help you remember to pay your bills on time, every time.
- Budgeting and Tracking Expenses – planning how much is going to be spent, which bills needs to be settled first, and keeping track of every outward flow of money will help prevent ending up short of cash come the month’s end or when an important, but unexpected, payment needs to suddenly be paid.
- Minimize Credit Costs – just because you have a high credit limit doesn’t mean you should max it out. The more sensible thing to do is to have an active credit account (or two) but to keep debts low. “Credit bureaus look at what’s called your credit utilization – the ratio of your credit card balance to credit limit – to determine how responsible you are with money,” Casey says.
- Avoiding New Credit Whenever Possible – building on the previous point, adding a new credit card account (especially in a short period of time) can badly affect your scores as the “credit bureaus are wary of consumers who suddenly have too much new credit in their name.”
- Protection Against Identity Theft – all your plans to keep debt under control can get derailed if a thief gets hold of your identity. One way to keep an eye on such identity thefts is to sign up for credit monitoring. Sites like myFICO.com help you “monitor your report and alert you of any changes made,” Casey says.