Tips to Maintain Good Credit

Maintaining good credit is very important in today's society. An individual's financial history is a determining factor in mortgage approvals, auto financing, and personal loans. When a lender reviews your credit report a negative score indicates a poor credit risk. The end result is generally a loan denial or a substantially higher interest rate. These financial consequences are not the only problems that poor credit can cause. An individual's career can be affected if a potential employer decides to run a credit report as part of a background check . Many apartment managers also perform credit checks to screen potential new renters. With so much at stake it is important for people to keep their financial house in order. Unfortunately, it does not take long to taint years of good credit ratings. So here are some tips to maintain good credit in your financial future.

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• Cancel extra credit cards. Keep a major card (i.e. Visa or MasterCard) and get rid of the rest. If you remove the additional cards there will be no opportunity to run up additional charges.
• Lower your credit limit. Banks will often increase the limit on your credit card once certain requirements have been met. The higher the limit the more you potentially can charge. The goal is to maintain your good credit so call and have the increased limit removed.
• Avoid paying with credit. If possible pay with cash, checks, or debit cards. This helps to ensure that you are only spending what you have available.
• Resist credit card offers. Receiving a pre-approved credit card offer in the mail brings about a stiff temptation to many people. To prevent the frequency of this occurring, remove your name from various mailing lists. Occasionally, some offers will make there way to your mailbox so you will need to discipline yourself to destroy the offers immediately.
• Resist impulse purchases. A good rule of thumb is to wait a day before making a purchase. This gives you time to consider if the item is really needed and often times avoids unnecessary impulse buys.
• Create a budget. This is an excellent tool to help ensure that you are living within your means and maintaining your good credit.
• Comparison shop. Many people (especially men) go into one store and make their purchase. A little investigative work can ensure that you are receiving the lowest price.
• Create a saving plan. Place away money on a regular basis. This forms a nice financial cushion in case an emergency should arise.

Maintaining good credit is a worthy goal that we should all strive for. It is a key component in achieving financial stability. Although it may require some short term sacrifices the long term benefits are well worth it.

Mark Carney is a professional consultant with First American Debt Consolidation and Loans, a debt consolidation service specializing in financial education, credit counseling, and debt management services nationwide.