How to build and maintain good credit

Understanding how to build and maintain good credit is a subject that should be well versed, but is often ignored or overlooked. Having a good credit record will help signify to lenders that you are able to pay and manage your debts responsibly. It will make purchasing a car, buying/ renting a home, or qualifying for a loan a much easier process. It will also save you money because you will qualify for lower interest rates. Several factors affect your credit rating. Following are some good tips to keep in mind while building your credit score.

  • ·         Pay your bills on time.
    • o    Payment history is integral to building a good credit score. Payments made 30, 60, 90, and 120+ days past due will reflect on your credit report and significantly lower your score.
    • o   Failure to pay on an overdue account may lead to the account being “charged off as bad debt.”
    • o   Once an account is charged off as bad debt, a collection agency may pick up the debt and attempt to collect on it.  Now you will have a charge-off AND a collection on your credit report.


  • ·         Maintain a low current balance to your available credit.
    • o   It is recommended to keep your balance at or below 30% of your credit limit. For example, if you have a credit card with a $750 limit, it would be a good idea to keep your balance from going above $225.
    • o   Keeping a low current balance will help to indicate that you are not overspending or accruing debts beyond your means.


  • ·         Do not amass any public records.
    • o   Bankruptcies, Lawsuits, Liens, and Judgments are displayed in the public record section of your credit report.
    • o   Not having these items on your credit report will increase your credit worthiness considerably.
    • o   Depending on the item, public records may show on your credit report for 7 to 15 years.


  • Building a good credit report takes time.
    • The longer you maintain your accounts, the higher your score will be. Establishing long-term accounts with consistent payments will positively affect your credit score in that it will indicate stability and commitment to pay what you owe.  Lenders want to be assured that their client’s payments can be made consistently and on time.
    • Consumers new to credit will really see the benefits of maintaining a good credit record around the three year mark when their score is in the top percentile.
    • New credit users will generally have lower limits until a proven track record of payment is demonstrated. Having low limits can negatively affect your credit score as it indicates a lack of experience with managing high limits. However, consistent and on time payments will help to raise your limits, and thus raise your score. Having high limits with low balances will demonstrate financial responsibility and indicate to creditors that you are able to be trusted.


  • Inquiries can have a negative impact on your score.
    • Inquiries occur when a lender reviews your credit report.
    • Too many inquiries may demonstrate to other lenders that you are trying to overspend or are accumulating too much debt.
    • Each inquiry remains on your credit report for 2 years.

The importance of maintaining a good credit record cannot be overstated. There are several credit monitoring programs available that can help consumers keep an eye on their credit report as it grows and fluctuates. These programs usually charge a small fee, but prove to be worth it… especially while trying to build credit. It is always recommended that you check your credit report at least once a year to make note of any changes, both good and bad. Consumers are entitled to one free credit report a year through, a government sponsored website. Knowing what factors impact your credit score will be very beneficial in your quest to build an outstanding credit record. For any further inquiry, please email us at or call us at 512 285 6078. Thanks for reading.



Barret McCormick

Director of Operations

Accurate Credit Bureau


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