Keeping on Top of Your Credit Score

by Chris Bjorklund


Because of a past data breach, I receive a free credit monitoring service from one of my banks, so now I get frequent notices about my credit score. First, it’s up, and then a few weeks later, it’s down. Of course, I keep checking with the credit bureaus because I want to maintain an excellent credit score. It’s a point of pride.

Why do our credit scores suddenly drop? There are lots of reasons. Things like a missed payment, even for a small amount, can lower your score. Canceling credit cards and closing old accounts can cause a steep drop, as can having little or no activity on your cards. Carrying a large balance for a trip or wedding expenses can affect your rating, too. And you might be dinged for not having a variety of loan types, which is the case for many retirees who’ve paid off car loans and mortgages.

Here’s a strategy that some people use to keep their scores from dropping further, especially after retirement: Use your credit card to pay for everything, even if you can afford to pay with cash, and then make sure you pay off the entire balance on time every month. A side benefit is earning rebates or travel rewards from the credit card issuers.

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