5 Things People With Good Credit Avoid

It's a proven fact that paying your credit cards on time can boost your credit score, and with an excellent FICO score it really becomes easier to get approval for loans and at a lower rate. However, just achieving a good credit score is not the end of the road, you need to maintain it too.

If you have no clue how to deal with your credit, you might ruin it unknowingly. Managing and maintaining credit score isn't rocket science. You just need to know a few basic things.

To begin with, here are 5 things that people having good credit never do.

1) They don't wait for the due dates: We all know the dangers of having excessive credit card debt and people with good credit score know this very well. They usually pay their balances every month to avoid debt. They, too, never wait until the due date to pay off the cards and always pay before the report date.

The report date is when a creditor sends usage data to credit bureaus and paying by the time might help you boost your score. Or, if you have maxed out your cards, you could have racked up some extra reward points this way.

2) They never stop using their credit cards: Stop using your cards might be a solution to reduce spending. But people with good credit never stop using their cards - even if they go with minimal usage each month.

Some credit card companies cancel accounts that are long inactive. This affects the account holder's credit score in two different ways. A cancelled account often cause the overall credit utilization ratio to go beyond 30%, which usually triggers a massive drop in credit rating. Also, if the account has a good history, closing it might result in a lower credit score.

3) They never rely on one type of credit: Like many, you might also like to keep your finances simple and yet, think it wise to stick to one type of credit. However, people who have good score know that diversified credit profiles always help in the betterment of credit score.

Put simply, a blend of different types of accounts reflect that you are competent enough to manage different kind of debt and this adds positive points to your score.

4) They don't deny credit limit increase: If you are a good borrower, a creditor might increase your credit limit to several thousand dollars. Many people get shocked by this and often ask the creditor to stop. However, credit limit increases aren't always a bad thing. This, in fact, lowers the credit card utilization ratio and helps build a good credit score.

5) They regularly check for fraud: Most financial experts suggest that you should get a free copy of your credit report at least once a year. However, since people with excellent credit scores don't need a yearly checkup, they typically sign up for credit monitoring services. These monitoring services send alerts in case there is any kind of suspicious activities.

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