A credit score over 700 is considered a good credit score. An excellent score is in the 740-850 range. Here are some tips to build and/or maintain your credit score:
- The first step to maintaining a good credit score is by paying all bills on time. Not all bills benefit your credit score, but they will all hurt it if you do not pay them on time and they get reported to the credit bureaus. This includes, but is not limited to, rent/mortgages, utility bills, loan payments, and medical bills.
- Don’t open accounts you don’t intend to use. Have a plan and a purpose for your credit cards. For example, if you get offered 20% off your purchase at a store when you apply for their credit card, really think about how often you shop at that store. If it is not often at all, there is no reason to get the card.
- Keep your balance low in relation to your available credit. More specifically, do not use more than 25% of your credit limit. This shows credit bureaus that you can be trusted to have a line of credit and you use it, but you do not max it out each month.
- Pull your credit report to check any recent activity. Identity theft is a real thing and can seriously damage your credit. Make sure there is no fraudulent activity on your report. If there is, report it right away.
- Don’t close unused accounts in good standing. Find a use for your card, even if it is just for gasoline or a cell phone bill.
- Don’t request to decrease your credit limit on current cards. You never know when you might need it.
- Don’t open several new accounts in a short time. This makes credit bureaus think you are having financial issues and do not have enough money to pay for your current expenses. Also, your credit score drops slightly when you open a new credit line, so give it some time to build back up before requesting something new. This is very important when it comes to mortgages; do not open a vehicle loan if you are about to open a mortgage. Take care of the mortgage first, then give it some time and get your new car.
- Have a good mix of credit cards and installment loans. Examples are a major credit card, a store credit card, an auto loan, and a mortgage.
When you are ready to start building your credit, contact the U of I Community Credit Union. We offer the official credit card of the University of Illinois and want to help you reach your financial goals. Learn more about the Illini VISA and our rewards option here.