Maintaining your credit health
Good habits to keep your credit health strong
You've worked hard to build your credit, and now you're satisfied with where it stands. But the work doesn't stop here. Maintaining your credit health over time requires that you stay committed to the same practices you used to get this point.
So, how do you keep up the momentum and protect the progress you've made? Consider adopting these best practices to help maintain your credit.
Make on-time payments
Paying your creditors on time is a very important step toward maintaining a strong credit history. When you make on-time payments and show financial responsibility, lenders and creditors may be more willing to provide you an account. You may also qualify for a better interest rate.
To avoid missing payments, you may want to set up autopay on your accounts if it's available to you. If it isn't, you may want to set up reminders on your calendar to let you know when it's time to pay bills.
If you miss a payment or aren't able to pay the full amount, contact your lender right away to set up a payment arrangement. You might be able to negotiate a payment plan that works better for you and helps you avoid any negative impact on your credit.
Keep your credit accounts open and maintain a good credit mix
Showing a long track record of responsibly paying your bills may benefit your credit. If you have a credit card that's in good standing, you may want to keep the account open, even if you're not using it regularly. However, make sure that you weigh this against any fees that you may accumulate for keeping the card open, such as monthly or annual fees. You may also want to use the card every so often to ensure the lender doesn't close it for inactivity.
You can also show good financial health by having different types of credit accounts, such as a mortgage, car loan and credit card. Lenders and creditors like to see that you have a good credit mix. Having a diverse credit mix could have a positive impact on your credit score.
Maintain low balances and apply for new credit sparingly
Lenders want to see your credit usage (how much of your available credit you use) below 30%. An example of this would be keeping less than a $600 balance on a credit card with a $2,000 limit. Make sure to keep the balances at or below the 30% threshold and always pay your bills on time.
Another thing lenders look for is whether you've applied for credit sparingly. Each hard inquiry (credit check) may negatively impact your credit health. That's why it's important to only apply for accounts that you need when you need them. Otherwise, you could see a significant dip in your score, which could impact your future credit needs.
Pay down debt
Reducing the total amount of debt you owe and maintaining low balances can also help keep your credit health strong. You can start paying off your smallest amount of debt or your highest-interest debts. This shows that you're financially reliable and saves you money in the long run.
Maintaining your credit health requires consistency, planning and patience. By identifying the strategy that works for you and sticking to the plan, you can protect your credit from any blemishes in the future.
Check your credit report and manage your alerts
You should check your credit report regularly. This will help you identify errors or spot signs of fraud. Make sure you contact the credit bureaus right away to correct any errors you find. You can access your Experian® credit report through Chase Credit Journey® at any time.
Go to the What we monitor page to learn more about the credit and identity monitoring alerts we provide to help you stay on top of your financial health.
Key takeaways
- Make on-time payments to your lenders and creditors.
- Maintain low balances and apply for credit only when you need it.
- Pay down debts and maintain varying types of credit to keep your credit health strong.
- Check your credit report regularly to make sure all of your information is correct.
