Like many people, my credit score tends to change from one month to the next. Sometimes it’ll rise by five points. Other times it’ll drop by eight or nine. But for the most part, my credit score has consistently been over 800 for the past couple of decades. And the last time I checked my score, it was an 822. Given that the highest possible credit score is 850, I’m happy with that number.
In fact, Experian, one of the three credit reporting bureaus, calls a credit score of 800 or above exceptional. And I’m motivated to keep my score in that range because I know it makes me more likely to get approved for a new loan or credit card when I need one, and at the most competitive interest rates.
But the fact that my score is above an 800, and has been for years, isn’t an accident. Rather, I consistently do these things to keep my score where it is.
1. I pay my bills on time
Your payment history carries more weight than any other factor when calculating a credit score. Knowing that, I make a point to pay my bills on time. And a good way to ensure that I’m not late is to set my bills to get paid automatically.
For example, each month, I have money debited automatically from my checking account to cover my mortgage and car payment. Not having to write those checks myself spares me from being late — and seeing my credit score take a hit — due to human error.
2. I pay off my credit cards each month
My primary motivation to pay off my credit cards in full each month is to avoid racking up interest. But this practice also serves the important purpose of keeping my credit score in great shape.
Credit utilization, or the amount of revolving credit you’re using at once, is another big factor that goes into calculating a credit score. The lower your credit card balances are relative to your total spending limit across your various cards, the better it is for your credit score. Paying those cards off in full keeps my utilization down.
3. I’m choosy with my credit cards
Some people open a new credit card account every few months. On my end, it’s rare for me to open more than one new credit card in a given year. And I’ve been known to go several years without applying for a new credit card. This practice helps my credit score in a couple of ways.
First, each time you apply for a new credit card, you get a hard inquiry on your credit report that generally results in a minor credit score hit. A single hard inquiry isn’t a big deal. And you shouldn’t necessarily let it stop you from applying for a loan or credit card when you need one. But applying for several credit cards a year could have a more significant impact on your credit score, so the fact that I don’t do that helps.
Also, because I’m choosy with my credit cards, I tend to apply for ones that make sense for me to keep for many years. This, too, helps my score, because the longer you keep your accounts open and in good standing, the better it tends to be for your credit score.
4. I check my credit report every three months
Reading my credit report isn’t exactly an activity I look forward to. But I make myself do it every three months anyway.
Your credit report is a snapshot of your borrowing history. It contains a list of your open loans and credit card accounts, and it shows you your balances. It also tells you if there are late payments or delinquencies on your record and lists the hard inquiries you’ve recently had.
The reason I check my credit report regularly is twofold. First, credit reports can contain mistakes. And some mistakes, like a late payment that’s not legitimate, can drag down your credit score. So it’s important to be on the lookout for those.
Secondly, checking your credit report is a good way to discover if you’ve been the victim of fraud. A few years back, my husband discovered that a criminal had taken out a line of credit in his name by checking his credit report and seeing a lender listed that he didn’t recognize. He was able to resolve the issue before it caused a lot of damage.
You can request a free copy of your credit report from each of the three major credit bureaus on AnnualCreditReport.com.
It takes work on my part to keep my credit score above 800. But it’s worth doing because I know that if I want to borrow money, I should generally have an easy time getting access to credit. And if you take the same steps, you may find that your credit score improves nicely or stays in the excellent shape it’s already in.
