Build & Maintain Good Credit with These 6 Financial Tips

Woman using her credit card online

Having a good credit score can deliver a long list of advantages for consumers — and we outlined some of the top ones in our earlier Southern Bank blog article titled “7 Benefits to Having a Good Credit Score.” But as most consumers know, good credit doesn’t just happen on its own, and it doesn’t happen overnight. Rather, it takes time, discipline and some wise financial decision-making to establish.

But by developing and maintaining good financial habits, consumers can raise their credit scores and keep them high — then reap the benefits that their financial wellness can bring. Looking for guidance on building and maintaining good credit for yourself and your household? Consider these six tips for maintaining good credit from The Southern Bank:

1. Make on-time bill payments — Your payment history makes up 35% of your FICO Score, the credit score most widely used by lenders to determine your creditworthiness/the risk they take on when they let you borrow money. And since this is the primary factor used to determine your credit score, it also represents the top way to build and maintain good credit. So, both for those looking to improve a low credit score and for those looking to maintain a higher one, it’s critically important to stay on top of all bills received. It’s also important to make sure you never overlook or otherwise accidentally miss any payment deadlines. One strategy that can be helpful here, especially with recurring bills, is to set up automatic bill payments if you have a checking account that offers online banking and includes this feature.

2. Minimize your credit utilization — Calculated as a percentage, your credit utilization is a measure of the total balances you’re carrying on all your credit accounts vs. your overarching credit limit (the total of the amounts of money you’re approved to borrow on all of your credit accounts). To calculate it, you can add up all of the money owed on your credit accounts, then divide that figure by the sum total of all your credit-account limits. From a credit-score perspective, the lower the percentage of your available credit you’re using, the better. And as a rule of thumb, keeping this figure below 30% will help you avoid any negative impacts to your credit score.

3. Keep a close eye on your account statements — By making a habit of regularly reviewing your credit-account statements, you can stay on top of where your credit utilization stands and be on the lookout for any errors or fraudulent charges on your accounts. And if you do discover any billing errors or charges you’re not familiar with, it’s best to take action to correct them as soon as possible. In most cases, your credit issuer will work with you to fix any issues you may discover — but the sooner they’re identified and addressed, the better.

4. … and your credit reports — By law, U.S. consumers are entitled to a free copy of their credit report annually from each of the three major credit-reporting agencies — Equifax, Experian and TransUnion. And by ensuring that the information contained in these reports is accurate and up to date, you can catch any signs of possible identity theft early, then report any problems you might discover before they become worse. To get your free credit reports, visit and make a request.

5. Limit new credit applications — When it comes to establishing and maintaining good credit, it’s helpful to have a good credit mix, as this serves as an indication to lenders that you can handle your credit and debt responsibly. And one leading way to establish a good credit mix (or to improve on your existing one) is to get a personal credit card or business credit card, utilize it regularly, and maintain timely bill payments. But when you have a high number of recent credit applications, it can have a negative impact on your credit score. This is because each time you apply for a line of credit, the potential lender runs a “hard inquiry” requesting your credit report. While a single hard inquiry is likely to cause a small, temporary reduction in your credit score, a large number of them will cause a more significant drop and could lead lenders to view you as a risky borrower.

6. Set your priorities (and stick to them) — From a big-picture perspective, building and maintaining good credit (and healthy credit habits) is largely about ensuring that you’re keeping your spending within your financial means. And in most cases, this means prioritizing your needs over your wants, and ensuring that you’re not overspending on the non-necessities. You work hard, so you’re certainly allowed to (and deserve to) treat yourself on occasion — just always be careful to do so in a financially responsible manner that doesn’t put you into debt that you’re unable to comfortably handle.

At The Southern Bank, we pride ourselves on offering friendly, personalized service to all of our customers — and that includes providing guidance when you have questions about any of our banking services. To learn more about our Personal Banking services ranging from Personal Checking to Savings & Money Market, Certificates of Deposit (CDs), Mortgages and more, check out the Personal Banking page on our website or visit one of our local branches for friendly, in-person service with a smile.To learn more about our credit card offerings, which can provide a great way to establish your credit and build a good credit history by making on-time payments, visit the Personal Credit Card and Business Credit Card pages on our website.

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