How to Preserve Your Credit History After Improving It
Improving your credit history is a pretty big accomplishment — especially if you have a history of bad credit that includes bankruptcy, foreclosure, and/or late or missed payments. But what should you do once you’ve improved your credit? The answer is simple: Stay the course and keep doing what you’ve been doing.
While it takes discipline to obtain a good credit history, it also takes discipline to preserve it. Here are 5 ways you can do that:
- Treat all your debt equally
Whether you have revolving debt (credit cards) or installment debt (car loan or mortgage), it’s important that you treat all your debt equally by making on-time payments. - Keep inactive credit cards open to maintain a longer credit history
If you’ve paid off a credit card, you may be tempted to close the account altogether. But keeping your account open lengthens your credit history, which is beneficial when trying to get approved for other lines of credit. The longer your credit history, the better. - Keep paying your bills on time, every time
Since your payment history accounts for 35 percent of your credit history (according to Experian), it’s important to make sure you pay your bills on time, every time. If you have trouble staying organized with payments, you can always set up electronic bill payment reminders and schedule automatic payments. - Aim for a low credit utilization rate
Your credit utilization rate is the amount of revolving credit you’re currently using, divided by the total amount of revolving credit you have available. According to Experian, it is commonly recommended to keep your total credit utilization rate below 30 percent. For example, if your total credit card limit is $10,000, your credit utilization shouldn’t go any higher than $3,000 if you want to maintain a good credit history. - Keep an eye on your credit report
Since credit report errors can affect your credit and are more common than you may think, it’s important that you keep tabs on your credit reports. You can get a free annual credit report from each of the three major credit bureaus: Equifax, Experian and TransUnion.
If you’re in the process of improving your credit and need help getting approved for financing, a car dealership enrolled in the Credit Acceptance program can help!
Simply fill out the form on our website and we’ll connect you with a car dealership near you that can help you start your credit approval today!
