2016-12-21 / by admin / Credit History / No Comments

Top tips for having a flawless credit history

Attaining a perfect credit score is no walk in the park. It is like trying to achieve your perfect weight. In fact, a study in 2010 shows that only 0.5% attain a score above 850. If you want to be among these chosen few, then you do not need stories on how to massage your credit score to make it look good to lenders. You need real action! That’s why this article is meant just for you. Here are some top tips that can keep you on the course of a perfect credit score.

Get the right mix of credit accounts

There are two main types of credit accounts that can be listed on your account. Revolving accounts such as credit cards is one type. These accounts have a variable monthly payment based on the amount you borrow. The other form is the revolving accounts like mortgages and students loans. They are typically for large amounts of money with a fixed payment each month. If you want to have a perfect score, ensure you keep a combination of the two.

Keep your balances low

Having a high available credit to low debt will definitely earn you a perfect score. After all, credit bureaus use these two variables to determine your score. So it is better to have high available credit and low debt. To maintain this, try using your plastic only for emergency expenses. Additionally, you should also pay off balances as soon as possible if you want to keep that balance low.

Do not borrow to buy assets that depreciate in value

One major aspect you’ll have to alter is your borrowing style. Try and avoid buying assets that depreciate in value such as cars, vacations and clothes using loans. Remember, when you borrow, you will eventually need to pay back with some interest. So, if you borrow something that increases in value or makes you more money, you get richer, and it’ll be a lot easier to pay the loan. However, if you use the loaned resources to buy liabilities, then paying back the loan becomes even harder and this eventually reflects on your credit score.

Be consistent

Making it to have a top-rated credit history requires planning and more so consistency. You’ll need to religiously pay your bills on time and track your expenditures. It is not easy to create a budget and stick to nor spending more than you earn. That is why you need to be consistent. You will only make it by creating a system that will keep you in the right track.

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