The Holtz Group

3 Simple Ways to Build and Maintain Your Credit Score

3 Simple ways to build credit score
According to, nearly 47% of Americans live with credit card debt. Whether your focus is paying off debt, applying for a substantial loan, or simply looking to maintain good financial standing, it never hurts to actively seek ways to build your credit. After all, your credit score is a critical signifier of your overall financial health. Just as a high credit score can open new doors, just as firmly can a low one close them. Keep reading to learn a few simple ways to start building your credit today.

Establish Good Habits

Like most things in life, building or maintaining your credit score requires establishing good habits and putting them into practice until they become routine. A good starting point is to ensure you make credit card payments on time and pay at least the minimum amount (if your current finances allow it). One way to ensure this practice becomes a habit is to set reminders on your phone to ensure you don’t miss any important dates. Some issuers even provide the option of custom push notifications to remind you of an upcoming payment. Your payment history is the biggest factor impacting your credit score, so every missed or late payment can have long-term repercussions. In addition, aim to keep your credit utilization, the percent of credit limit you use, no higher than 30%, as this is the second most prominent factor in determining your score aside from payment history.

Keep Credit Accounts Open

You likely have a few unused credit cards hiding in your wallet. An understandable first instinct is to close the account associated with an old card and begin searching for one with benefits that better suit your current financial situation. However, it’s important to note that while closing a neglected card can keep you from paying an unnecessary annual fee or missing a payment, it can harm your credit score. When you decide to close an account, you are effectively terminating the available credit limit on the associated card, which in turn causes a spike in your credit utilization ratio and reduces your average account age. Before you decide to close a credit card, consider if the potential hit to your score is worth it. If you ultimately decide to cancel a card, ensure that it is fully paid off and that any automatic payments have been assigned to active cards before calling your provider. Like closing a credit account, applying for new accounts can result in a temporary drop in your score. However, applying for multiple at once can result in an even steeper decline, so be sure to allow a window of at least six months before introducing a new line of credit. Allowing time between opening and closing new accounts can save you from a credit score drop and give you the time to assess what credit cards best suit your financial situation moving forward.

Regularly Monitor Your Credit Score

A credit score is a three-digit number calculated based on the data present in your credit reports. A high number signifies to possible lenders that you are a low-risk recipient and are likely to pay back potential loans within a reasonable timeframe. Contrarily, a low credit score indicates being historically less responsible in meeting such criteria. Consequently, your credit history and score are not only essential to your financial life and prospects but are crucial resources for tracking and determining your financial standing. To maintain or build a healthy credit score, you must check your report at least a few times a year. Monitoring your credit score can allow you to keep track of your progress or catch potential errors while giving you insight into what potential lenders might see when you apply for your next loan.

Need Financial Advice?

Check out our previous blog post on Common Financial Mistakes and How To Avoid Them. In addition, if you need personalized financial advice, our team is always here to help—contact us today to book an appointment!