Ron Thompson

Five tips for creating and maintaining a good credit score

By Ron Thompson

Taking seriously your need to maintain good credit can be an important step toward achieving your financial and life goals.

Maintaining a good credit score can mean the difference between getting and not getting a loan needed for a home or car. More recently, maintaining a good credit score can also affect your ability to get the job or rent the apartment you want.

Here are five quick and easy ways to improve and maintain a healthy credit score:

1. Keep those cards open. A credit score is influenced by how much credit we have available to us, compared to how much we have used. Older credit is also weighed more positively than newer credit, so keep a credit card open if you can, even if you aren't using it any longer.

2. Don't "max out" the card. You don't have to pay your entire card balance every month to keep a good score, but don't run it up to the limit either. A monthly balance that is kept at less than half of your card's limit will improve your score, while a monthly balance of more than half the limit will drop it, and this will happen for every card you have. So if you have a choice of paying off one card or paying three cards down to below half their limit, go for the second option. Your score will jump significantly for each card you keep below half its limit.

3. Don't be more than 30 days late on a payment. Payments that are late by a few days or even a few weeks don't affect your credit, but payments that are late by more than 30 days affect the score significantly. Not surprisingly, payments that are late by more than 60 or 90 days will drop the score even more.

4. Check your credit once a year. You can pull your credit once a year for free (yes, it's really free!) at You'll be glad you did.

5. Dispute mistakes. Identity theft can cause errors on your credit report, and past credit issues you had resolved can still mistakenly appear. If you see any errors, such as a creditor having charged you for something you didn't buy, be sure to call the credit bureaus and let them know you are disputing the error or erroneous charge. A charge that is in dispute will not affect your score while it's being resolved.

Above all, take your credit score (and your need to maintain good credit) seriously. It can be an important step toward achieving your financial and life goals.

Ron Thompson is a Welcome Home Loan Mortgage Loan Originator at the Community Loan Fund.

NMLS #225348. Licensed by the New Hampshire Banking Department.