Did I tell you that my car was totaled last month? I was so depressed. I loved that car. Everyone was so excited for me to #1: be alive (really, that is all that matters) and #2: go car shopping.
But I don’t WANT to go car shopping! I loved my car, and it was almost paid off. After dealing with the nightmare of insurance companies and proof of total loss, waiting for the check and the rental car fiasco etc, the LAST thing I wanted to do was go out and get harassed by a car salesman.
When she ran my credit my FICO score was a solid 826. Paul is right behind me, but still above 800, and we have had a healthy competition on who can keep theirs higher going for the past 6 years or so. I always win, but I digress… 😉
When building (and maintaining) a high credit score, there are several things to consider, and to keep in mind. Maintaining that high credit score never ends – although is does get MUCH easier as time goes along.
How We Joined the 800+ Credit Score Club
1. Consistency. This is number one for a reason. Be consistent with your ON TIME payments. Be consistent with your credit card payments, your mortgage payments, your car payments – everything. This is one of the reasons I suggest staying one month ahead of your expenses. It helps you to schedule and prepare for the next month’s bills.
2. Watch your balances. You want to keep your credit used/available credit ratio low. Shoot for 30% or less. See more about credit ratios and why 30% is a good goal.
RELATED: Boosting Your Credit Score – Keep your Debt to Available Credit Ratio Low + Oldest Cards Remain OPEN!
3. Apply for NEW credit sparingly. Checking your credit often does ding your score. How often your credit is checked can make up up to 10% of your score. Try not to check it or to open new lines of credit unless you must.
4. Size matters. Well, perhaps not size so much as length. The length of time you’ve had good credit matters. Which, is why you need to remain consistent with your timely payments. The longer you have credit cards, car paymetns, mortgage payments in good standing, the better your credit will become.
5. Keep it reasonable. One of the ways Paul and I both have such great credit scores is because we know our limits (figuratively and literally). We know how much we can realistically pay back every month, and how much we cannot.
Would YOU loan money to you? That is the ultimate question.
By keeping your credit card balances at or below 30% of available credit, by paying your bills on time, by not applying for new credit often (we only apply for something new every few years, if that!) and by keeping our oldest credit lines open and healthy, we are able to easily maintain stellar credit scores. We are in this for the long haul folks!
See more of our financial tips before you leave!