By: Lisa Hartley, Vice President, Univest Capital, Inc.
As a commercial lender, I often come across credit reports that have been damaged for various reasons, sometimes unbeknownst to the person applying. Keeping an excellent credit score has many benefits including being offered the lowest rates available, approval for higher limits, and the best rewards on the credit cards you own. Following these simple rules will get you well on your way to a better credit score or help you maintain your current score.
Make your payments on time. This should be a no brainer, but being 30+ days late on any account can damage your credit score substantially. Even if it’s something minimal in your mind (i.e. Home Depot credit card), being late will drop your score. So make your payment before it is due, even if it’s the minimum amount required.
Have a credit card and use it! We get it, you don’t like having debt. Who does? But if you cannot show creditors your ability to pay back debt, who will want to loan you money? Have a credit card that you use every month, and be sure to pay it off.
Have multiple credit cards, but don’t use them all! A common misconception is that having multiple credit cards is a bad thing. The reality is the more revolving debt you have available, the better your credit rating will be. Don’t close out your $0.00 balance cards! This will decrease your revolving availability and can have a negative impact on your credit score. Using less than 10 percent of your total credit card limit at any given time can substantially increase your score.
Apply for and open new accounts only as needed. Don’t open accounts just “because.” Applying for numerous credit cards and/or loans at one time can make it appear that you are in financial stress. Apply only as needed, which will also help keep inquires on your report to a minimum.
Avoid having your credit pulled unnecessarily. One or two inquires on your credit in a short period of time will not dramatically affect your score, however, numerous inquiries can. When applying for a loan, make sure you know who will be pulling your credit report. Just that financial institution? If you are working with a broker, make sure they aren’t sharing your personal information with numerous lenders that will each be pulling your credit.
Something else to keep in mind is utilizing a credit monitoring and alert service. Subscribing to one of these services can help prevent identity theft which can save you years of trying to restore your good credit standing. Sometimes things happen that are out of our control, but sticking to these basic principles will help you increase your score and/or maintain the healthy score you already have.
Univest Capital Inc. is a subsidiary of Univest Bank and Trust Co. Equal Opportunity Lender.