A good credit score is not just a number – it’s an indication on how well you have used your credit and this score will have a great effect in your life. Bad credit score will hinder some transactions and increase interest rates on some services you want to avail. This means you’ll have to pay more of some products and services. You might not even gain the services you want.

If you are already enjoying a good credit score: good for you. But that doesn’t mean you can slack off in your financial transactions. Any misstep in your payment will immediately reflect on your credit history. You need be conscious on your spending habits to maintain the good credit score. It’s also helpful to monitor your credit score. There are different websites where people can monitor their credit scores online in order to help maintain their good credit.

Smart Use of Credit

Among the biggest mistakes a consumer has that resulted to bad credit score is on how they use their credit. A credit limit of $5,000 doesn’t mean you have to reach that limit. Practice the 25% rule: never spend more than 25% beyond your credit limit. This means you don’t have to spend more than $1,250 or else it will have some drastic effects in your credit score.

If you think $1,250 is too small, ask your issuer to increase your credit limit. If you have $10,000 in credit limit, you should be able to use up t $2,500 without hurting your credit score.

Get a Major Credit Card

The type of credit card used in transactions will also have an effect on your credit score. It is highly recommended that you use at least one major credit card. This will be used to your advantage because they will show that you have enough qualifications for this type of credit card. Apply for a secured card if your initial application is denied. You’ll even enjoy some rewards because of the perks that come with use of credit card.

Take Care of Disputes Immediately

There will always be something wrong with your bills and payments. But that doesn’t mean you will have to let it escalate to collections just because some of the services didn’t come as expected. Pay the bills and complain about it in small claims court. More often than not, a good claim will result to a refund. Dragging the dispute to collections can be a major blow to your credit history. If you see something is wrong with any of your bills, take care of it as soon as possible.