How to Esablish an Excellent Credit Rating

Establishing an excellent credit rating is important for several reasons. When a potential employer checks your credit, your high rating will indicate your sense of responsibility and efficiency. A high credit score can mean a lower interest rate for financing a home or car and savings of thousands of dollars over the life of the loan. Establishing excellent credit requires discipline and focus. While not always easy, the results make it worth the effort.

Instructions

Establishing an Excellent Credit Rating

1

Gather your bills together and create a monthly budget that you can follow. Prioritize your bills based on due date, and account for every bill you have to pay each month.

2

Follow your budget and pay your bills on or before the due date. Always pay at least the minimum payments, and pay a little more than minimum if you can afford it.

3

Use cash for purchases and avoid using your credit accounts as much as possible. However, do not allow your credit accounts to fall to zero balance. Always carry some sort of balance on your credit cards, but try to carry a balance that is no more than 90 percent of the total available credit. Avoid maximizing your credit cards.

4

Leave a credit account open if you do decide to pay off the balance. Having old credit in good standing on your credit report will help raise your credit score and push you closer to maintaining an excellent credit rating.

5

Review your credit reports from each of the three main reporting agencies at least once every six months. Federal law entitles you to one free credit report each calendar year, so you will have to pay for the second one. Review all of your personal information and credit account information to ensure accuracy. If you find any inaccurate information, report it to the credit reporting agency immediately.