4 Things to Keep In Mind After You Repair Your Credit

Digging yourself out of debt and improving your credit score can be a great feeling, but the payoff of working so hard can be all for naught if you do not adhere to good credit practices moving forward.

When you get your score back to a good level, you may feel relaxed, which can cause you to delve back into bad habits. Here are a few things to keep in mind when trying to maintain good credit practices:

Compare credit reports
To help you keep these habits, look at your credit report. Chances are that when you were repairing your credit score, you accessed your credit report. This can be a great financial tool to use during this process because it can show your entire credit history and any blemishes you may have incurred. If you still have this document, compare it with a new one. By looking at these side by side, you can see the progress you have made and give yourself motivation to continue these good habits.

Stay away from new lines of debt
With a prime credit score in your sights, you may feel confident with taking on new lines of debt. Although a higher credit score will assist you in getting approved for a mortgage, new credit accounts and other loans, you should hold off on trying to open new lines of debt. Being able to qualify for these loans with a good interest rate is fantastic, but you shouldn't take on new lines of debt after working so valiantly to improve your score.

Refinance your card
As you have built up your score, you can use this to your advantage. If you feel that your current credit card has too high an interest rate, you can always look into refinancing this card. With a lower interest rate, you will have less-expensive interest charges, which can make paying back your current accounts a bit easier. The general rule of thumb is to take on a new rate that is at least 1 percent lower than your current rate, as this will help drop your charges down quite a bit.

Before you sign up for this option, be forewarned that many credit card companies charge you a fee in order to accomplish this procedure. Every financial institution is different, so be sure to read your contract's fine print.

Fix bad habits
Keeping up good credit habits is as easy as remembering what got you there. Your score could have taken a dive because you were making late credit card payments or you were spending beyond your financial means. Whatever the case was, by fixing these bad habits once you have improved your score, you will be able to maintain this score.

If you were making late credit card payments, try setting up a calendar reminder on your phone. If you found that you were overspending, try creating a budget for yourself. All of these factors can go a long way to help you improve your credit score and keep it there.