5 ways to protect your credit score (that everyone should know)

Your credit score is important. It’s a three-digit number that lenders use to decide whether or not to give you a loan, and it can also affect the interest rate you’re offered. A high credit score means you’re a low-risk borrower, which means you’re more likely to get a loan and a lower interest rate.

A low credit score means you’re a high-risk borrower, which means you’re less likely to get a loan and will be offered a higher interest rate. So, what can you do to protect your credit score?

1. pay off debt on time

If you’re like most people, you probably have some debt that you’re working on paying down. And if you’re like most people, you probably want to pay off that debt as quickly as possible. After all, the sooner you pay off your debt, the sooner you can start working on other financial goals, like saving for a house, a new car or that special vacation.

But did you know that paying off your debt on time can also help you protect your credit score? That’s right – by making timely payments on your debts, you can help improve your credit score.

So, if you’re looking for a way to improve your credit score, paying off your debt on time is a great place to start.

2. be smart with credit card usage

Credit cards can be a great tool for managing your finances, but if you’re not careful, they can also be a quick way to ruin your credit score. That’s why it’s important to be smart about your credit card usage and to understand how your credit card habits can impact your credit score.

If you’re using your credit card a lot, you might be harming your credit score. That’s because your credit utilization ratio – which is the amount of credit you’re using compared to your credit limit – makes up 30% of your credit score. So if you’re using a lot of your credit, it can bring your score down.

There are a few other things you should keep in mind when it comes to your credit card habits and your credit score. For example, paying your bills on time is important, as is keeping your balances low. But if you’re using your credit card wisely, you can help boost your credit score.

3. don’t just close out your credit cards

Most people know that it’s important to have a good credit score. But what many people don’t realize is that closing out your credit cards can ruin your credit score.

When you close a credit card, the account is still reported to the credit bureaus. And because the account is now closed, it will look like you’re maxed out on your credit. This can hurt your credit score and make it harder for you to get approved for new credit in the future.

When you close a credit card, it can lower your credit utilization ratio, which is the amount of debt you have compared to your credit limit. A lower credit utilization ratio can hurt your credit score.

Additionally, closing a credit card can shorten your credit history, which is also a factor in your credit score. If you have an old credit card that you don’t use, it’s better to keep it open and active rather than close it out.

4. protect personal information to protect your credit

One of the best ways to protect your credit score is to keep your personal information safe. That means being careful about who you give your information and only sharing it with people or companies you trust. It also means being vigilant about keeping your information safe online. With so much of our lives now moving online, it’s more important than ever to keep our personal information safe and secure.

In a 2020 research done by Verizon they found that approximately 4,000 documented breaches discovered the following:

• 52% of them (almost half) were the consequence of hacking.
  
  
• Phishing, which was responsible for over 33 percent of all data breaches, was the second-largest danger according to hacking figures obtained for the research.
  
  
• A significant culprit, malware accounts for 28% of data breaches.

Data breaches have caused havoc to individuals and businesses alike. Most startups do not recover from data breaches due to the financial implications associated with it. 

There are a few simple steps you can take to protect your personal information and improve your credit score. For starters, you can shred any documents that have your personal information on them before you throw them away. You can also opt-out of credit card offers and pre-screened credit offers. And you can keep an eye on your credit report to make sure that no one is using your personal information without your permission.

5. keep an eye on all your accounts

It is important to keep an eye on all of your accounts to maintain a good credit score. This includes credit cards, loans, and any other type of account that reports to the credit agencies. By knowing where your money is going and how it is being spent, you can make sure that you are using your credit wisely and not unintentionally harming your credit score. 

You can get a free report from sites like Annual Credit Report. Pull a report from each agency every year to get the most up-to-date, relevant information. Your report won’t show a credit score, but it will show you the factors that affect your score and how to address them.

If you see something on your credit report that you do not understand, do not hesitate to contact a credit counseling or credit repair service. They will be able to help you understand what is happening with your credit and how you can improve it over time.

Your credit score can make or ruin your financial stability. Taking the measures necessary will not only protect your finances but also open you up to better financial services. The guidelines provided in this article will help you get started on guarding your credit score. 

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