NEW YORK (MainStreet) — Excellent credit isn't about the big things you do once in a while. It's about the little things you do on a daily basis. It's an investment you make in yourself every time you pay a bill, or even every time you head off to the grocery store. If your credit is bad, you might be able to take steps to repair it, like paying off old debts or disputing dubious charges. But you won't be able to maintain it unless you engage in the behaviors that people with excellent credit do on a daily basis.
Investing Time in Your Credit
Mike Sullivan is the director of education with Take Charge America. He says that, first and foremost, to have excellent credit, you need to invest time. "People who have excellent credit check their credit on a regular basis," he said. "They're very alert to paying their bills on time. They become educated about the right things to do." All of that education, both about your own credit and what makes for excellent credit in general takes time. "It's like working out," says Sullivan. "If you work out five hours a week, it's not an obsession. But five hours a day might be a little much." In the case of checking your credit, it doesn't even take an hour a day.
Paying All Your Bills on Time All the Time
Paying your bills a timely fashion is the biggest factor in figuring your credit score. But what most people don't know is just how slim the threshold is. "Even having a 99.5% payment history is still considered just fair," says Greg Lull, head of consumer insights at Credit Karma. "You really have to have 100% on-time payments. Anything less than 97% is considered poor." And while you might not think that it is, from the perspective of credit reporting bureaus "missing one bill is a huge problem."