It’s easy to overlook the importance of maintaining good credit scores when you’re young. Yet, your credit score can serious, long-term effects on your life. A score can drive up your interest rates on credit lines and even get you denied for an apartment.

If you have a good or excellent score without having tried hard, you’re likely wondering how to maintain a good credit score. Keep reading for what you should know about credit scores and how to keep a good one.

What is a Credit Score?

If you’re not entirely sure what a credit score actually is in practice, think of it as a bit like a test score you get from the credit bureaus. The credit bureaus factor in a bunch of financial facts about you from your credit report. Then, you get a three-digit score.

The higher the score, you better your financial grade. Banks, other lenders, and even potential landlords use that score to help decide how much they can trust you’ll pay your bills or loans.

Advantages of Good Credit Score

The benefits of a good credit score mostly turn up where some kind of credit or billing is involved. You typically see better interest rates on credit cards and loans.

Other benefits include:

  • Better car insurance rates
  • No utility deposits
  • Higher limits on credit cards

With credit score basics out of the way, let’s look at keeping that score.

How To Maintain a Good Credit Score

There are lots of little strategies for keeping your good score. To keep your efforts focused, though, the following tactics are some of the big ones.

Pay Your Bills

Your bill payment history has a huge impact on your overall credit score. Pay your bills and pay them on time. It keeps that score looking solid.

Keep Credit Card Balances Down

Another biggie in terms of your score is the “credit utilization ratio.” Basically, credit bureaus want you to use less than 30% of the available credit on your credit cards.

Don’t Apply for Credit Too Often

This is specifically about actual applications for new lines of credit. That triggers a hard inquiry, which shows up on your credit report and can ding your score.

In general, you don’t want more than about one hard inquiry a year. You don’t want more than two hard inquiries on your credit report at any given time.

If your score isn’t so great, head over here to learn about ways to fix credit fast.

A Good Credit Score and You

The question of how to maintain a good credit score mostly boils down to making practical decisions. Things like paying your bills on time, limiting credit applications, and keeping a modest balance on your credit cards.

A good credit score isn’t something you want to dismiss out of hand if you have one. Keeping it will help lower your interest rates and improve your odds of scoring a good apartment.

Looking for more tips on practical personal finance? Check out some of the other posts over in our Money section.