Achieving a perfect credit score isn’t hinged on your income or bank account balance nearly as much as your habits.
These are the habits to get into if you want to see your credit score top out.
Get On A Budget
Nothing makes your debt spiral out of control more than not paying attention to your income and expenses. Do they balance out? If not, your needs should be balanced to your income.
Taking the time to sit down and crunch some numbers will save you headache down the road. It’s a lot easier to build credit than it is to repair credit.
Don’t Overextend
This is similar to budgeting but it depends more on you. The budget will show you what you can afford but staying within your means will take personal dedication.
Once your needs are budgeted, the extra is your emergency fund and leisure money. Impulse purchases that cut into your needs or emergency fund are ingredients for a credit score drop.
Take Your Emergency Fund Seriously
The last thing you want to do is start thinking to yourself, well it’s just sitting there. Uncontrollable expenses can happen anytime. When they do, it’s the emergency that can cut into your needs and leisure cash. Unless you’ve left your emergency fund untouched, uncontrollable debt will follow.
Don’t Pay Your Bills Late
There is more than one reason for this. The obvious reason is because your score goes down with late payments.
The other reason is because if an emergency does happen, unexpected expenses with outstanding debt pushes you even further behind.
Understand Yourself
Know where you’ve gone wrong in the past. It will take dedication to prevent self-sabotage.
Hang Onto A Credit Card You Don’t Use
Make sure it’s one with no annual fee. Also make sure it’s payments have been on time and it’s paid off.
This is a good idea for a couple reasons. First, having an emergency card is a good idea period. Second, part of your credit score is not only how long your debts have been paid in a timely manner but how long you’ve had certain accounts open.
Keep An Eye On Your Credit Score
This is just plain responsible. You can stand a basketball player at the free throw line and have them practice all day long but if you blindfold them so they can’t see when they hit and when they miss they will never get better.
Monitoring that number can help you discover problems you didn’t know were there. If your number starts dropping when you thought you were doing everything right then there is something you’re missing.
Don’t Make Silly Mistakes
According to myFICO.com, several credit inquiries can lower your score. How much, depends on each person. Being aware of your score’s current standing will keep you from reaching too high. Applying for cards that you won’t get approved for just add to the number of inquiries that can do damage.
Instead, know your score and shop for a new card appropriately.
Know When To Charge
A total understanding of your funds is essential to keeping a credit score in check. There are times to just pay for something outright and there are times to charge the card. These decisions a different for everybody and based on your unique situation.
Did your tax refund just come in? Is your leisure cash higher than usual? Can you afford to upgrade your cell phone with an outright purchase instead of adding it to your bill and still leave your emergency, leisure, and needs funds in perfect working order? Can you cut the monthly bill down and make it easier to pay?
Habits are hard to change, but if you can get into these, you’re on your way to an 850 credit score.