Maintaining Good CreditWe talk a lot about improving less-than-stellar credit, but continuing to maintain good credit once you’ve worked to build it requires a different perspective. Credit maintenance is about commitment and consistency. Good credit is a journey, not a destination, and like many other goals – such as staying healthy, doing well in school or advancing your career – it requires you to routinely practice a key set of behaviors. Below, we list some of the steps necessary to keep your credit looking great for the long term.

Steps for maintaining good credit

Check your credit reports on a regular basis

Even after reaching your credit goals, you should continue to check your credit reports as frequently as possible. Not only is this a great way to ensure that reporting errors don’t creep in and hurt your credit scores, but you can also keep an eye out for identity thieves opening new accounts using your information and wrecking the credit you’ve worked so hard for. While there are other ways to catch identity theft, in some cases, you would never know unless you examined your credit reports. Since you are legally entitled to one free report yearly from each of the three credit bureaus – Equifax, Experian and TransUnion – through, it is worth checking once a year at the very least. However, if you recently went through a major life change – a marriage, divorce, home purchase, a family death or becoming a parent – you may want to check your credit reports more frequently. These types of events create major paper trails that benefit scammers who are eager to steal peoples’ identities and credit histories. In this case, you might consider purchasing a credit monitoring service, which will provide you with up-to-date copies of your credit reports and scores along with real-time monitoring for the creation of new accounts or other suspicious activity reported by the credit bureaus. It isn’t enough to simply have good credit – in order to keep it, you have to know what’s happening with it.

Be judicious when opening or applying for new accounts

Adding multiple new credit cards and lines of credit, especially very quickly, can hurt your credit scores. One of the big reasons for this is that requests for new credit accounts are reviewed by lenders who use hard inquiries to evaluate your credit. Multiple hard inquiries can have a small, but overall negative affect on your credit while simultaneously putting you at risk of looking desperate for funds and thus less favorable to future lenders. Furthermore, new credit accounts lower the average account age in your credit history, which in the short run also hurts your credit. That said, applying for new credit is sometimes necessary. To combat the negative impact of opening a new account, you should strategically plan for them. Any time you’re considering opening a new account, you should have a well-defined purpose for doing so and some understanding of how the new account will affect your credit scores. Also, make sure you give it some time between applications, whether you’re approved or not, to give your credit time to bounce back.

Try to avoid closing your old accounts

One of the most important things you can do to keep your credit healthy is to make sure you don’t close too many long-standing credit accounts, as their age lengthens your credit history and help contribute to your overall credit health. This is especially true of credit cards; while it might be easier to close out a card than to deal with an annual fee, for example, for a rarely used card, doing so will hurt your credit by raising your credit utilization ratio. This is the percentage of credit you are using compared to the total amount of credit you have available (or your credit limits) – typically, it’s best to have a ratio of 30% or less. Instead of closing out accounts, you can try and see if you can have any fees associated with these accounts waived or reduced. As with opening new accounts, if you ever do have to close an account, make sure that it’s done strategically and with an understanding of how it will impact your credit so you can plan for the fallout.

Request an increase to your credit limit if you need more credit

One way to get new credit if you need it is to increase the credit limit on one of your existing accounts. Doing so is a safe way of accessing new credit, without the negatives that can come with opening a new credit line. Additionally, this could actually boost your score by providing you with a better credit utilization ratio. Assuming you don’t change your spending habits, you’ll be using a lower percentage of your total available credit, helping you to keep your total credit usage low, which has positive effects on your credit score. Remember, credit usage that is deemed excessive can tarnish your scores (even if you pay off the balance in a timely fashion).

What happens if you don’t have good credit?

Maybe you’re reading this and your credit isn’t so hot, or perhaps you have good credit now but worry about what to do if that changes in the future. The good and bad news when it comes to your credit is that nothing lasts forever. If you don’t have good credit, there’s no reason why you can’t build it back up to good standing. Remember, it’s a journey. The same guidelines we’ve talked about in this post will help you, along with taking credit-building actions such as getting a secured credit card and paying your bills on time. You can learn more about improving bad credit by reading this blog post.

For more information about how to maintain good credit or improve credit, keep reading our credit monitoring and credit repair blogs, where we give tips and pointers on all things credit-related.