Making on-time payments on loans and maintaining low credit balances are important factors that contribute to keeping a good credit score, according to About.com. Keeping old accounts open and avoiding unnecessary credit applications are also helpful.
Payment history and amounts owed are the most crucial factors in a FICO score calculation, according to MyFICO. A history of on-time payments is the most significant contributor to a good score in the payment history category. The amounts owed category is based on the total overall credit balance someone has, the number of accounts with balances, and the ratio of balances owed to credit limits on revolving accounts. Minimizing balances on one or more credit cards is especially beneficial to a good score.
The average length of credit history is another compelling score category. Therefore, holding on to credit accounts even when they are paid off helps with maintaining a score. Closing old accounts dramatically reduces the average length of accounts. Opening a lot of new accounts in a short period of time is also problematic, so minimizing applications is important, reports MyFICO.
Setting up automatic payments to ensure all bills get paid on time is one tip to avoid late payments. Holding a rainy-day savings fund also protects against reliance on credit, according to Wells Fargo.