Achieve An Excellent Credit Score With These Expert Financial Habits

Having an excellent credit score can benefit your personal finances, of course. But if you are also a business owner, it can impact your business’s financial health as well. Unfortunately, not all business owners innately know how to improve a credit score. Thankfully however, you do not need a finance degree to figure out how to improve your credit score. If you want to have a perfect credit score, use these habits of people with excellent credit ratings as a personal guide.

Always Pay On Time

Always pay your credit card bills and loan payments on time. This is one of the most important habits of people with excellent credit scores. Payment history counts for 35% of your FICO credit score calculations. It can be presumed that other credit scoring agencies also use a similar formula. That means that if you want to have a great credit score, you cannot miss or be late on a single payment.

Pay More Than Once

Pay your credit card bills more than once a month, if possible. Doing so will help you to lower your credit utilization rates. Credit utilization accounts for about 30% of your FICO credit score. That makes it the second most important factor for credit scores. Be sure to keep your credit utilization low by paying your credit card off more than just once a month. This is a little known financial trick that is used by only those with an excellent credit score. Take advantage of it.

Do Not Apply For Credit

Do not apply for anymore credit than you already have. Credit requests cause a hard inquiry to appear on your credit report. That hurts your credit score. That is why you want to avoid having multiple credit inquiries in a short period, or even a long one. It inadvertently indicates to creditors that you are not doing well financially speaking. Be sure to not apply for new credit cards or loans while you are trying to improve your credit score to an excellent rating.

Check Your Credit Reports

Be sure to check your credit score as often as possible, including your business credit report. There are now many online credit check services that do this for free. Just be sure to choose a service that does not cause a hard inquiry on your credit. People with excellent credit scores frequently check their credit reports to ensure that there are no errors or fraudulent accounts. If you do the same, you are sure to have an excellent credit rating in no time.

Avoid Closing Accounts

If you want to have a great credit score, do not close any existing credit accounts you have. This will negatively impact your credit history. The length of your credit history comprises 15% of your FICO credit score calculations. That makes it the third most important factor. There is no quick fix to make your credit history any longer. But, closing credit accounts is a surefire way to quickly lower your credit score thanks to its impact on your credit history length. Be sure to keep the credit accounts you already have open to keep your credit score high.

If you are a business owner, personal financial problems with your credit can impact your ability to secure business funding and capital injections. You want to have an excellent credit score. That way, you never have to worry about your business financial performance suffering. Follow the financial habits above to achieve a perfect credit score and maintain it for years to come.

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