Good credit is an important tool for financial health. Protect yourself from things like fraud, identity theft or bad money habits that could bring it down.

If you’re reading this article, you probably know how important healthy credit is to your financial well-being. Good credit scores, generally in the range of over 700, make you more likely to be approved for loans, but also mean you’ll likely pay less to borrow money. The good news is there are clear steps you can take to improve your credit score , but once you’ve built solid credit it’s important to maintain it as well.

 So how do you do it? Here are 6 tips for maintaining a strong credit score:

1. Stay on top of your bills.

The most important factor to determining your credit score is whether you consistently pay your bills on time. This doesn’t change once you’ve built up a good score. When a bill is more than 30 days past due, it will show up on your credit report. Past due payments take seven years to roll off your report so they can impact your credit for a long time.

Many experts recommend doing simple things like setting up reminders, or using features like autopay to help you stay on top of payments and avoid falling behind. Even requesting a billing date be moved to a different time of the month or week can be helpful for some people to stay in control.

2. Be disciplined with credit.

Having good credit means you often get access to better terms and perks than someone with a lower score. It can be tempting to leverage this new found power and take on more debt, or even to help out a friend or family member by using your credit to co-sign a loan for someone else, but experts urge caution.

Signing up for multiple credit cards, loans or other debt products in quick succession can be a red flag for lenders and immediately drop your score. And while it can feel good to help a friend or family member who is financially struggling by extending them the benefit of your credit, it can quickly turn into a real liability. Even if they are responsible, circumstances outside of their control, such as a job loss or medical emergency, could force a default and quickly impact your credit.

3. Sign up for (free) monitoring.

Credit monitoring services watch your credit reports and credit score and alert you to changes and impacts to your score. Providers vary with some offering free services that often make money through product recommendation, while others can cost more than $15 a month. Be sure to research your options and understand what you’re getting, especially if the service is marketed as free, but has hidden fees or other requirements.

4. Review your credit reports.

Credit monitoring is helpful, but to really understand what’s going on in your credit, you’re going to want to keep tabs on your credit reports. Remember, everyone can get a free credit report annually, from each of the major credit bureaus, at Annual Credit Report. Reviewing these reports ensures you won’t miss information reported by one credit firm, but not another and give you a more holistic view of your finances.

5. Be prepared with a fraud alert or freeze.

Did you know you can restrict access to your credit report? It’s called a credit freeze and it prevents anyone from opening a new credit account. To freeze your credit, you need to contact the major credit bureaus directly. There is no cost to a credit freeze and it lasts as long as you want it to. The freeze restricts new accounts only, so your credit will still be available to evaluate for things like renting an apartment or applying for a job. You can also temporarily lift the freeze if you do want to apply for something like a new credit card.

If you suspect you’ve been the victim of identity theft, you can also place a fraud alert on your credit report. Fraud alerts make it harder to open new accounts because businesses must verify your identity before issuing credit. The process to implement a fraud alert is similar to a credit freeze.

6. Be safe online. 

A recent study by the AARP found more than 40 million people were impacted by identity theft in one year. Victims of identity theft lost an average of more than $1,500, but the true costs can be much higher. That’s because identity theft can make a significant impact on your credit. Scammers will open new accounts with your identity, run up balances and move on without paying the bill. Cleaning up after an attack like this can take time, leaving your credit in bad shape.

Experts recommend maintaining strong passwords and utilizing technology like multi-factor identification whenever available. Unfortunately, kids are increasingly becoming the target of identity crimes as well. A recent study found that in the US, 1 in 50 children are victims of identity theft each year. You can help keep your children protected the same way you’re monitoring your own credit - ask for a free credit report. Generally, children under the age of 18 won’t have credit reports, so if a report is available it could point to nefarious activity.

Sources:

https://www.consumerfinance.gov/ask-cfpb/what-is-a-credit-monitoring-service-en-1365/

https://consumer.ftc.gov/articles/what-know-about-credit-freezes-fraud-alerts

https://www.myfico.com/credit-education/blog/identity-theft-affects-fico-scores

https://consumer.gov/scams-identity-theft/recovering-identity-theft

https://consumer.ftc.gov/articles/how-protect-your-child-identity-theft