How to keep your credit strong

July 22nd, 2011 Mary Schmidt
Keep credit strong RS

A solid credit score is a crucial component to a sound financial future. Your score will play a role in your ability to rent an apartment, qualify for a loan, buy a house or even get a job. It can also affect how much you’ll pay on interest charges, insurance and even cell phone contracts. In other words – your credit score impacts virtually all major financial occurrences throughout your life.

With so much riding on that three-digit number, how can you ensure that you’re credit score remains strong for years to come? We’ve put together some simple guidelines to help you out:

  1. Always pay bills on time.
  2. Pay your credit cards every month. If this is not feasible, make sure you pay at least the minimum payment and that you do so long before it is due. Many people can get into serious trouble if they miss one payment, which can often snowball into expensive fees.
  3. Be aware that if you sign a lease or put utilities in your name you will be solely responsible for making the payments. Many roommates make the mistake of rooming together and end up with a collection when one or two move out without paying the bill.
  4. Avoid giving your financial or personal information to anyone.
  5. Shred unwanted offers of credit and unneeded credit statements.
  6. Invest wisely. Determine your risk level and talk with financial counselors about your unique strategic approach.
  7. If you find yourself in a financial bind, take a good look at all your options. Put your bills in order of highest interest rate to lowest interest rate so that you aggressively pay off one and then double up on the next one until you have paid them all off. Most importantly – don’t be afraid to ask for help.
  8. Avoid overdrafts by setting up transfers or payment protection plans. Even the most organized people can overdraw their account on occasion and with fees of close to $20 to $25 per item this can quickly wreak havoc on your wallet.
  9. As a newlywed, make sure both you and your partner continue to establish a credit history. Both of your credit scores will be taken into account when you buy a home or other major investments.
  10. Use your credit cards responsibly and don’t let them reach their limit or spend beyond your means.
  11. Complete credit applications carefully and accurately.
  12. If you move, let your creditors know your new address as soon as possible to avoid losing bills or receiving them late.
  13. If your credit card is lost or stolen, report it immediately.
  14. Review your credit reports on an annual basis for accuracy and report any errors immediately. If you need to correct information, follow the reporting procedures carefully. Many times you will be asked to submit the errors in writing – this is an important step in putting the correct information on record.
Mary Schmidt

About the author

Mary Schmidt is manager of a MidWestOne’s location. She specializes, among other things, in consumer loans, auto loans, home equity loans, and real estate lending.

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