A credit score, as the name implies, is a score or a numerical expression that represents a "credit worthiness" of a person. In simpler words, it is a figure that could tell if a person is worthy of giving a credit or not. This score is based on a statistical analysis of an individual's credit files and credit report information. Lenders like banks and credit card companies use this credit score to evaluate the risks involved in lending someone their money. This is for them to avoid the case where they lend someone their money but this person would not be able to pay them, either intentionally or unintentionally. For those who are found "worthy", this score is also used to determine the interest rate and credit limit applicable for the customer.
This is why it is important for you to maintain a good credit score. Having a good credit score enables you to apply for better credit agreements and limits. If you are a newbie to this system, then you should know the things you must not do to develop a good credit score.
There are at least 7 simple ways on how you could build up and maintain a good credit score. First on the list is that you must be punctual at all times. You must, at all means, pay all your bills punctually. Late payments would have the biggest negative impact on your credit score. If you have quite a problem with this, then you should start to change yourself. The sooner you get back on the right track, which is, being able to pay on time, the faster you could repair your bad credit score. If you are really unable to beat the deadline, you have to beat the late fee date, which is around 10 to 15 days after the due date.
The next on the list is that you should check your credit report and status on a regular basis. Do not allow your credit health to suffer due to wrong information or being completely uninformed. You must be able to find any inaccurate information on your credit report. If in case you find one, contact your creditor immediately.
The 3rd on the list is to resolve negative open items. Even though your past creditors, medical bills, loans do not call you and try to collect payment, your unsettled issues with them would still hurt your score. This is why you should still settle your payments with them even though they are not actively collecting.
4th on the list is that you watch your debt. You must keep your account balances below 50% of your available credit. The next thing you must do is to give yourself time. You must slowly but surely establish yourself and your good credit score.
The last 2 on the list is that you could improve your credit limit and establish different types of credit. But do not boost your credit limit too much to avoid being hurt in the end. And you should try to build a good reputation on different types of credit so you could appear more reliable.