17 Things People With Good Credit Always Do

Getting and maintaining a good credit score doesn’t happen overnight. It takes work and sacrifice and responsibility. No matter what your financial situation is, it takes time to prove your worth — literally — and show just how willing you are of repaying any amount of money you borrow. But by doing these things, anyone is capable of achieving a credit score they can be proud of. Time to stop sweeping your money issues under the rug and get building.

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Pay on time

This one's a no-brainer and seeing how it's the top factor in most credit-scoring models, the one thing you need to be on top of the most. Payments made 30 days or more past their due date will drag down a credit score quicker than those combat boots you've been coveting but don't need.

RELATED: This is how to understand your credit score in Canada.

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Pay before the actual due date

In addition to the last point, try to pay bills off early — not on the date they're due. Sometimes payments aren't received until after said date, if you pay them online. But more notably, a report date (a.k.a. when a creditor sends updates to the credit bureaus) might be before your actual due date which can sometimes mean the difference between an actual balance being reported vs. a zero balance.

RELATED: 18 ways to reduce credit card debt, from Canadian finance experts.

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Set up automatic bill payments

Even if you're only paying the minimum, at least you'll know the bills will be paid on time — and that will have a bigger impact on your score than the amount paid.

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Credit card balances are kept low

This both saves money on interest but it also keeps your credit utilization ratio (the balance of your credit accounts compared to your credit limit) low — which accounts for a good chunk of your overall credit score. Basically, the lower your balance, the higher your score will be.

SEE ALSO: The 10 best credit cards in Canada for 2019.

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Keep tabs on credit report

Errors on credit cards can obviously negatively impact credit scores so by keeping on top of your score, you'll know right away if something looks off or is flat-out incorrect. There are some apps that can monitor your credit for you, and even provide daily alerts when any changes are made.

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Read the fine print

Those with good credit know the exact terms and fees of the company they're dealing with before even applying. And by knowing said terms is how they control their credit — and spending. That means they can pick the card that works best for them.

RELATED: The 10 best cash back credit cards in Canada for 2019.

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Co-sign for no one

By co-signing on a loan for someone, you are putting your credit history at risk. It doesn't matter how responsible they claim to be; if anything happens financially to them or they fail to make payments, you're going to be on the hook.

SEE ALSO: How to get the best mortgage rate in Ontario.

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Never cut up credit cards

By reducing the average length of time on a card can actually lower your credit score. So if you have credit cards, you shouldn't cut them up nor should they remain inactive for too long, otherwise the bank could close them. Instead, use your credit care for small purchases each month and pay them off in full to keep them active.

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Credit history has been steady over time

In order to have a good credit score, a long history of taking your debts seriously is required. Those with excellent scores typically have years, sometimes decades, of credit history with evidence showing they pay their bills on time.

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Never turn down credit limit increases

This one might be a little surprising but by increasing your credit card limit, it widens the gap between your balance and the maximum amount you have to play with, thus helping maintain a good score.

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Only use credit cards for convenience

By not relying on credit cards, and purely using them because they're easy or you want the rewards or points, means you can live within your means. Leaning on that credit means building up balances that can't be paid off within a month — which means you're likely living outside your means.

RELATED: Why Canadian women need to save more money than men for retirement.

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Refuse to sign up for retail accounts

Oh, those retail charge cards can be tempting, especially if they're at a store you shop at often, but they can be the death of good credit, thanks to their ridiculously high interest rates. Plus, every inquiry into your credit score reduces your rating, depending on the credit history, so the less it's looked into, the better.

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Have a mortgage

Renting might seem like the right alternative but it only makes sense if you're planning on staying in that home for a couple of years — but even then, with inflation, it's still a coin toss. Purchasing a home is better in the long run and a higher credit score will give you a lower interest rate.

RELATED: 10 things to know about second mortgages.

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Have different types of credit

It might feel safer — and simpler — to have one type of credit but credit-scoring models take all kinds of accounts into, well, account, so diversifying your financial portfolio works in your favour, whether it be credit cards, a mortgage or car loan. So, go ahead and sign up for that travel credit card.

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Be all-around responsible

Not only are they fiscally accountable but they tend to keep the rest of their lives in check as well. A generalization? Perhaps. But those who have better credit typically take fewer risks, thus live more responsibly.

YOU MIGHT ALSO LIKE: 18 ways to reduce your credit card debt, from Canadian finance experts

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They’re organized

Now, just because there's a little chaos in your life doesn't necessarily mean you're a financial flake. Sometimes the most unorganized person can be amazing with finances while those who are good at maintaining order are not so good at keeping track of their money. But being aware of spending and saving is a good place to start on the road to good credit.

RELATED: 11 habits of successful people.

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Stay out of debt

This seems pretty obvious but those with excellent credit don't have a ton of unsecured debt — meaning anything that isn't secured by anything like a home or car like student loans and credit cards. Accumulating excess date leads to higher monthly payments to keep up with; people with good credit do everything they can to avoid that.

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