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It seems pretty easy to keep track of your credit score, whether that’s with a paid service or free through your bank. However, the number that you see isn’t always accurate or reliable. Also, more importantly, the credit score you see from a free provider most often isn’t the number that lenders will see.

Knowing where you stand with credit is great however we think that it’s good to put some best practices in place so that you can keep your credit score as high as it can be for your circumstances. After all, how are you supposed to optimize your credit score when you don’t even know what it is? The answer is by focusing more on your overall “credit hygiene” rather than on any one particular score.

Here are five simple tips to make sure you have good credit hygiene.

Never go over your credit limit.

If you are close to your limit, there is always a chance that an unexpected bill will come through and push you over your limit leaving you facing overdraft fees and penalties. If this is the case your score can be up to 200 points lower than it should be. It is best to stick to only using up to 50% of your limit. So if you have a $2000 limit on your credit card, make sure to try and not go over $1000. If you are trying to build up your credit health quickly, aim to not use more than 30% of your limit. This way, should an unexpected cost arise, you have some room to breathe.

Always accept a credit limit increase.

Having a larger limit gives you stronger borrowing power and makes you look stronger and healthier in terms of credit. This is also an easy way to instantly reduce the percentage of the credit that you are using.

Use all your cards to keep them active; spread your your balance around.

When looking at maximizing your credit score you should always look at your utilization from each lender. Also, spreading your balance around is another easy way to keep your usage percentages down. If you have multiple cards make sure to use them all to keep them active. This could just be for one small purchase every few months. Any cards are helping to generate your score and so you want to keep them open and available to use.

Pay off your cards twice monthly.

The best way to pay off your cards is to clear the balance completely twice monthly. Once a few days before the statement is due and once about a week after. By doing this you will never be stuck with late payment fees or interest charges on your purchases. Paying off the card before your statement is due, will also lower your utilization percentage. This is known as the Statement Date Strategy and is especially effective if you have smaller limits.

Pay disputed bills and then claim them back.

Most people don’t want to pay small fraudulent charges on their accounts. They will dispute the charge and wait for the case to be resolved rather than paying the charges off and then disputing them afterwards. We believe the opposite is a better strategy. Pay off these charges and then have your provider re-pay your account. This does not apply to very large charges however, in that case, you should always talk to your provider to see what strategy they think is best.

If you are concerned about your credit health, we are more than happy to help you get to a place when you are in good standing to borrow, get a mortgage and get on track to achieving your financial goals.

Keeping track of your credit score using a free service is always a good idea, regardless of whether the score is 100% accurate. These services will usually let you know if you have a sudden drop in your score or if someone has pulled your credit report without your authorization.

Get in touch today to see how we can help you.



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