In today’s ever changing financial landscape, credit is king. Having excellent credit is something we all strive for, but when you have lower credit, bad credit, or no credit, knowing how to get there can be a challenge. Learning to use some of the habits of people with great credit can help you take the first steps toward rebuilding or establishing your credit.

5 Habits for Credit-Building Success

The people with the best credit scores are very good about practicing these building

  • Pay bills on time. Payment history accounts for 35% of your FICO rating, so keeping it clean is key. Payments made 30 days late or later can be very damaging. Avoid these by setting up automatic payments whenever possible. Also, making payments in full on balances and maintaining a budget can help set you up for success.
  • Keep your credit card balances low. Only making minimum payments on credit cards could lead to high credit balances. It is important to know how to watch your credit utilization. This is the amount owed on a credit card in proportion to its limit. People who are successful in the credit game typically keep utilization under 30%, but if you want to raise your credit score even more, it is recommended that you maintain a utilization ratio of 10% or less on each of your credit cards.
  • Do not apply for too much credit at once. Applying for several credit cards at the same time, or applying frequently in a short period of time, can send the wrong signal to future lenders. When a potential lender checks your credit, they will see these inquiries. Having multiple open inquires on your credit reports can bring down your score, which can affect your financing opportunities.
  • Take the time to build a positive credit history. Potential lenders are more likely to work with you if they can see your credit habits over time. The length of your credit history accounts for 15% of your FICO score, and having several years of history can be very helpful. Set yourself up for success by using credit to pay for the things you frequently purchase and can manage to pay off, such as gas or groceries. If you are just starting out with credit, it is potentially helpful to have things like rent payments reported to the credit bureaus to help you get established.
  • Know your credit. Excellent credit does not happen by accident, and knowing what is on your credit reports can greatly increase your potential for success. Frequently monitoring your credit reports will allow you to see what is impacting you both positively and negatively. It will also allow you to check for and report any errors or suspicious activity. To help you monitor your credit, you are able to pull one free credit report every 12 months from each of the three major credit reporting agencies (Experian, Equifax and TransUnion). You can do this by visiting to request your reports.

The Bottom Line

Additional steps toward striving for excellent credit could include financing your next vehicle. An auto loan is one of the best credit building tools around if you make all of the payments on time. Here at Drivers Lane, our service can match you with a dealership that helps people with credit challenges get financing. Let us help you begin the rebuilding process by putting in an auto loan request today.