5 Tricks To Keep Your R1 Credit Rating

An R1 credit rating means you’ve paid you debts on time. Your credit rating affects your ability to get credit. Credit can take many forms that you may not have considered. For example, your ability to rent an apartment or even get certain types of job may depend on your credit rating to some degree. Thus it is easy to see the value of getting and maintaining a good credit rating. In view of that, here are five tips to help you maintain, or even improve, your credit rating.

1. Pay your bills on time every time

If you haven’t been paying your bills on time, start. Right now. Especially pay your credit card debt and other loans. Payment history is the single most important influence on your credit score and can be up to 35 percent of your total score. Your recent history will carry more weight than what you did five years ago, so start now and get in, and stay in, the habit.

2. Pay down your debts, and charge less

Lenders want to see some space between your reported debt and your credit limits. What most people don’t realize is that they don’t care if you carry a balance, or if you don’t. the credit cards may care, as they’re not making money if you’re carrying no balance, but charging less often can actually improve your score, as even if you pay off the full amount every month, you will still show a balance on your credit report.

3. Pay off your old accounts but don’t close them.

The popular wisdom was to close accounts you’re not using. That has changed. It doesn’t help your score these days and can actually hurt your account. While this is no fun from the point of view of simplifying your life, it makes your balance carried forward seem larger relative to the available credit. Thus unused credit cards can actually help your credit rating.

4. Don’t be afraid to get credit counseling

If you have a lot of high interest debt and could fall behind, you should look into a non profit agency like the Consumer Credit Counseling Services, who can set up a debt repayment plan. These services can negotiate lower interest rates and help you pay off your bills within a few years.

It probably won’t hurt your credit rating either, contrary to popular opinion. The FICO score ignores all reference to these payment plans because it was discovered that people on plans aren’t more likely to default than others.

5. Avoid Bankruptcy

That one is as obvious as it sounds. Bankruptcy is necessary for some people but means seven years of bad luck in the form of bad credit.