Tips that will make you flip! 5 Tips to a Good Credit Score

mastercard, discover card, picture of credit card, thisthatandthemba, this that and the mbaInterest rates are at all-time lows but does any of it really matter if you cannot secure the loan that you need?  Take an inventory of your accounts before you go out to secure the loan.  Here are 5 tips that you need to take notice of to ensure that you are credit worthy.

Do not close accounts that you do not use

This is a big no-no you do not want to close accounts that you have had open for a long time.  One of the factors in determining your credit score is the length of time the accounts have been open. Additionally, you may think that since the card has a zero balance it would be good to close it.  This philosophy while good in theory may not be a good idea because of credit utilization, which simply put is the ratio of balances owed to the credit limits on credit cards.  Good credit you would typically have lower credit utilization, if you start closing cards your utilization will go up if you have other cards that have balances.

Pay bills on time

Well this may seem obvious, but maintaining good habits of paying your bills on time will help you build credit worthiness.  Even if you are not able to pay the bill in full each month, continue making the minimum payments until you are able to pay down your balance.  Even one missed payment can knock off 20-100 points off your credit score.  If you have old accounts out there that are way past due it may be in your best interest to contact the lender to see if you can explore settlement.  Open unresolved accounts on your credit report are only hurting you.

Get serious about your balances

You need to take ownership of your situation.  If you have a credit card problem and you tend to spend a lot, admitting it is one of the first steps.  Great you have admitted you have a problem, it is not the end of the world.  You may need to seek professional help through a credit counselor to right the ship and get your finances in order.  If you feel you can get it under control yourself, even adding a few dollars to your minimum payments each month will start to move you in the right direction and move your score upwards.

You have more than one credit score

There are three credit reporting agencies that your bank or lender may pull the report from.  Do not work towards just improving your Experian score when you have no idea which one your lender pulls.  The point is you should be practicing good habits that have a positive impact on the score.  Each of the 3 agencies has a slightly different way of calculating the score.  One agency may penalize you for having no balance while the other may view it favorably.   Focusing on good habits and ensuring the accuracy of your credit report will help build good credit habits.

Paying in full each month doesn’t hide high balances on your credit report

Sure the misconception is that using your credit card is great as long as you pay it off each month.  Well if you are consistently charging and using a good deal of your credit limit it could actually be hurting you.  The credit report only uses the account balance at the time that the issuer supplies the credit data to the reporting agency.  This usually takes place after a statement is sent to you.  To the agency, it looks as though you have a high balance on your cards because it is not shown anywhere that the balance is paid in full each month.

Now that you have these tips in your arsenal go out there and secure that loan that you need!  Any other good tips that I missed?

PHOTO BY: Marsmet543
About Christopher


  1. I agree with you Chris esp with paying bills on time. For some people it becomes a habit to delay bills which takes a big toll on credit rating.

  2. These are all great points but I found the last one the most interesting.

    Many people don’t realize what you stated and it’s so important to understand! Debt vs Available Credit ratio is a huge part of your score and if the CC company reported to the credit agency when your card had a high balance (despite the fact that you paid it off) it IS going to hurt your score.

    It’s really stupid that it works like that – well…the entire credit score system is stupid, but unfortunately that’s the way it works.

    • It IS really stupid that it works that way! I’m frsutrated just reading that. It’s like you just can’t get it right… pay off all your balance, but make sure your balance isn’t too high, but make sure that it isn’t too low, etc etc.. ugh!

    • @ Jason – I agree it seems we are at the mercy of how these agencies want to calculate the score. Yup ding me for that…. ding me for this…no debt…heres a ding…

  3. All of these suggestions are extremely important, and must be followed without fail in order to maintain a high credit score. By now, everyone who plans to apply for any type of credit should be aware that a good credit score is the number one factor in getting approved for credit and personal loans at great interest rates. More people need to read this post.

    • @ Anthony – I hate the fact that you can only get the report once a year for free from each agency and that everyone is going to hold you to that credit report but you have to pay to get it…just rubs me the wrong way I guess!

  4. Some people just do not recognize the importance of their credit score. They think they can pay their bills late and are fine as long as they don’t get late fees. They need to realize that all of those late payments may be affecting their credit score, especially if those late payments are for things such as credit cards, loans, mortgages, etc.

    • @ Modest Money – You hit the nail right on the head, oh what is a few days late you may avoid that late fee, but the credit agency has already received the negative feedback from your lender or cc company.

      • Coincidentally, I just got dinged with a late credit card payment. After moving I didn’t receive one of my credit card statements. I was stressing a bit because that card was on a 0% balance transfer that I was risking losing. Luckily the rep on the phone helped retain the balance transfer rate, but it still got reported to the credit bureaus.

      • @ Jeremy – ESP buddy, I knew it and I was writing this post for you! 🙂

  5. Great tips! The first one is really counter-intuitive. I don’t want this open! So why not close it? But there’s no downside in leaving it open with $0 balance. I closed an account I had open for a decade because of all the bad feelings I had associated with it. That hit my score hard, by about 20 points.

  6. Keeping the right amount of debt charged to a credit card is important, when I paid off my credit cards recently- my Transunion score dropped and my Experian score went up. The different agencies report very differently, it’s pretty strange.

  7. It’s hard to believe that closing an old account with no balance will hurt you. Good advice about paying something every month. Not only will missing a payment hurt your credit score, your interest rate will jump until you have at least 6 months of on time payments.

  8. On that last tip about having high balances, if I know I’ve spent a lot and will have a really, really high balance, I send in a mid-period payment. That way it never gets reported.

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