Paying down your debt and improving your credit score can be a great feeling. This can be especially sweet if you formerly had a poor credit score and worked hard to improve it. Although you may think the hard part is over, you should always work to maintain a good credit score. By getting even a little bit complacent, you could sink back into your bad habits and see all your hard work go to waste. It is important to always stay on top of your finances, even if they are in good shape. Here are a few things to remember after you have repaired your credit score:
Don't apply for loans right away
One of the main reasons why you decided to repair your credit score may have been to get approved for a loan or another line of credit. Although this is a very common reason for credit repair, you should hold off on applying for any new debt for the time being. With an improved credit score, lenders and other financial institutions may offer you deals on new credit cards and loans. It is best in this situation to let your credit score stay where it is, give it some breathing room and then apply for these loans down the road.
Look into rules of refinancing
If you are currently paying an expensive mortgage with a high interest, you may be ready to switch over to one that will be a little less harsh on your checking account. One way you can go about this is by refinancing your mortgage. Many homebuyers do this, but make sure you do so with caution.
When refinancing, you will have to pay a transfer fee, running the risk of your credit score decreasing thanks in part to a hard inquiry. Make sure you consult with your lender beforehand and ask if there will be any credit score risks if you decide to refinance.
Maintain good habits
The best way to make sure your improved credit score stays that way is by continuing the practices that got you there. By making your credit card payments on time and avoiding hard inquiries, you will be in a good place. If you are worried about slipping, try making a payment schedule or budget for yourself.