9 Tips to Practice Good Credit Hygiene
Sponsored by JPMorgan Chase
Good credit can help unlock the door to a brighter future.
That’s not just a metaphor – your credit score is one of the first pieces of information lenders review before approving you for a mortgage, business loan or other purchase requiring finance. A strong credit history could help position you as a more trustworthy borrower.
Think of building credit like practicing good hygiene. The more you maintain good financial habits and clean up past mistakes, the better your credit can be.
Seyi Ola, a JPMorgan Chase Community Manager in Trenton, NJ, offers these nine important tips to help establish and maintain good credit health.
1. Check your credit reports
Reviewing your credit report is the first step in finding information that may be affecting your score. You have a credit report with the three major bureaus. You can access your ExperianTM credit report for free with Chase Credit Journey®.
2. Monitor your credit score
This three-digit number can be key to your lender’s decision and helps determine the interest rate offer you’ll receive. With a higher credit score, you may be able to lower your interest rate. Keep in mind, credit score is just one of the many factors considered. The five main categories that determine your credit score are payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and types of credit used (10%).
3. Pay off delinquent accounts
Bring any delinquent accounts current, or work to pay them off when you are able. Delinquencies include past due payments, charge-offs, collections or judgments.
4. Make payments on time
Every on-time payment is important as it helps demonstrate good financial behavior. It also takes time to rebuild your credit score after delinquencies and late payments.
5. Avoid new debt
Because hard inquiries can also affect your credit score, try to avoid applying for multiple lines of credit in a short period of time. Hard inquiries will appear on your report for two years.
