Know how to keep excellent score
Credit
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How to maintain good credit
You don’t have to go into debt to maintain good credit. The two biggest factors in your credit score, accounting for about two-thirds of it, are on-time payments and the amount of your available credit you use.
That means simply paying all your bills on time goes a long way toward protecting your credit. On the other hand, paying 30 days or more past the due date can devastate your score.
If you do use credit cards, paying the balance in full is the best way to manage those bills. Zeroing out the balance doesn’t hurt your credit score, saves you from paying interest and ensures you’re not using too much of your credit limit.
If you can’t pay in full, try to stay below 30 percent of your limit.
Other strategies that may help:
■ Keep credit cards open unless you have a compelling reason to close them. Even unused credit cards help your score by raising your overall credit limit. The average age of your credit accounts also has a small effect on your credit score.
■ Ask a friend or relative with excellent credit to add you as an authorized user. That adds their credit history on the card to your credit profile. You don’t have to use or possess the credit card for this to help your score. ■ If you are uncomfortable with a credit card, consider using it like a debit card by paying the balance as soon as a charge posts. The account adds to your credit history but you prevent worries about balances piling up.
Credit scores could drop during the pandemic as people rely more heavily on their credit and increase their balances. Your score can rebound fairly quickly once you pay balances down, as long as you continue to pay at least the minimum on time. If you need help paying creditors, contact them, preferably before you miss a payment.
boshea@nerdwallet.com. Twitter: @Beverlyoshea.