Maintaining a good credit score will allow you to reap the benefits of loan approval, low interest rates, and excellent credit card offers. Healthy credit has the power to save consumers a considerable amount of money over their lifespan.

General credit tips:

1. Aged credit:

   Since being in the credit game longer shows you have had more practice at managing credit it makes you less of a credit risk. Very old credit (20-30 years), can add an extra points to credit scores.

2. Be careful when closing aged credit:

   Aside from the possibility of the score going down due to closing an account,  closed accounts can be removed by the creditor after two years. It is much better to keep the account open and make sure it is active by using it once a year just to ensure the credit score will remain as high as possible.

3. Revolving accounts:

   Revolving credit means accounts the consumer decides how much they will charge, up to the limit, and whether they will pay a minimum payment or more. Revolving credit is a reflection of how a consumer manages all aspects of their account so it weighs more heavily on the score. Healthy, aged, revolving accounts will reflect positively on scores.

4. Keep balances low on revolving credit:

   When your aggregate balance-to-limit ratio goes above 7 – 10% of the limits, scores will start to drop. The closer the balance gets to the limit the more the score drops.

5. Variety:

   Having many accounts and varied types of credit is important. The majority of time when we see great scores, 740-850, we find this to be one of the factors. When there are many accounts the consumer’s ability to manage all types of credit becomes more transparent.

6. Be careful when co-signing:

   Consumers should not co-sign for any loans or credit that they do not have control over paying. Since others can make payments late and the effect will drop all party’s credit scores, without complete control consumers are put in vulnerable positions.

7. Don’t randomly apply for credit cards:

   Make sure the card you are applying for will be a definite approval since the inquiry made to evaluate your risk by the creditor (credit review) may drop your credit scores. There are credit card sites that will supply you with offers based on your current credit scores like Nerdwallet.

8. Late payments:

   One new late payment could drop a score over 100 points. The majority of negative information stays on the report for 7 years from the date of delinquency.

Credit tips to follow before purchasing a home:

Buying a home is likely the most costly investment you’ll make over the course of your life. This is an ultimate financial goal for most consumers and having good credit will help make the process easier and less expensive in the long run.

1. Plan in advance:

   Review credit at least six months prior to applying for a mortgage or refinancing, and at best a few years before. Since great credit scores do not happen overnight and time can only be earned, it is in your best interest to start preparing as soon as possible.

2. Primary credit:

   You must have primary credit (accounts in your name) in order to have a credit score. Being the primary account holder on three credit accounts over two years old can be a great help when applying for a mortgage. Most banks these days want to see at least two or three lines of credit that are not authorized user accounts if they are to approve a loan.

3. Open & closing accounts:

   If you’re looking to take out a mortgage, make sure you’re not opening and closing a lot of accounts. You will want your scores in the best shape possible for approval and inquiries/closing accounts will impact your scores.

4. Trending credit data:

   This is a relatively new way for banks to predict your potential risk for paying late or not paying at all. When the bank pulls your reports they will review 2 years’ worth of revolving payment history to see if you are responsible with your revolving accounts or if you consistently carry over a high balance. Keep this in mind while preparing to apply.

5. Review your credit scores:

   The majority of mortgage lenders use your FICO Mortgage Lending Score, take initiative and purchase your reports. The scores you find on Credit Karma, and other credit sites may be “free” but are not calculated the same as your FICO Mortgage Lending Score, don’t make the mistake of relying on them.

Credit scores are formulated based on what appears on credit bureaus in the moment credit is pulled by the bank, credit profiles are updated approximately once every 30 days. Make sure credit is updated prior to the bank evaluating your credit report and scores can help the mortgage application process.

What to do if you see negative information reporting?

It is your legal right as a consumer to dispute negative information on your credit reports, but you should be careful before picking up the phone and calling the bureaus or sending in a letter. It’s common for individuals who are not seasoned credit experts to perjure themselves and make matters worse.

If there are negative accounts, speak to a credit expert, professionals who specialize in credit will be able to assess whether they can be removed, updated, or corrected.