Build Good Credit

Let's talk about credit! Have you ever reviewed your credit report and noticed that your credit score has suddenly dropped? Well, this is quite common and so here are some key things that can prevent your credit score from dropping:

  1. Avoid unnecessary hard credit inquiries: When you are shopping for a new loan or line of credit, you may notice a sharp drop while you are in the midst of applying. In this case, the drop in your credit score is likely a result of too many hard credit inquiries. It is important to note that checking your credit score is not considered a hard inquiry. You’ll only need to worry about hard inquiries if you are applying to a new loan or line of credit. ​

  2. Pay your bills & loans on time: Creditors will penalize you for missing payments and so if you are unable to make payments on time, be sure to communicate with your creditors as soon as possible to determine your alternative payment options. ​

  3. Avoid closing old accounts: Your credit card accounts make up a vital part of your credit history, so if you have accounts that show you've been paying your bills on time, you’ll want to keep them as part of your credit history. If you have accounts you’ve paid off, keep them open and make the occasional small purchase on them but be to pay them off in full each month. ​

  4. Keep your credit card balances low: A growing amount of revolving debt leads to an increase in your credit utilization rate. So basically, if you have a $10,000 credit limit with a balance of $5,000 then you have a utilization rate of 50%. This utlization rate is used to determine 30% of your score. And so it is important to keep your utilization rates as low as possible.

Want to learn more? Now is a good time to enroll in our Build Your Credit course or refresh yourself to understand how credit works and ensure you build good credit!


Clever Girl Finance has been extremely gracious in allowing esteem magazine share their content . I encourage all readers to visit their site regularly and take advantage of amazing resources and advice available - they are truly Clever Girls! Many thanks to the team at Clever Girls for helping to build our financial esteem.

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