Now that you know why good credit is so important, it is time to discover how to establish and maintain it. Use the internet to find at least seven (more is better) ways you can establish and maintain good credit. Be sure to note your sources so that you can cite them. Once you have your information create an infographic or an online poster to display your knowledge.
RUBRIC
Student provides at least 7 ways (70 pts)
Student lists sources (20 pts)
Student shows creativity (10 pts)
1. Make payments on time: One of the best ways to establish and maintain good credit is to always make your payments on time. This shows creditors that you are responsible and can be trusted with credit. (Source: Experian website)
2. Keep credit card balances low: Keeping your credit card balances low relative to your credit limit can also help improve your credit score. High credit card balances can negatively affect your credit utilization ratio. (Source: Equifax website)
3. Avoid opening too many new accounts at once: Opening too many new accounts at once can be seen as a red flag to creditors and may indicate that you are in financial distress. It is best to open new accounts sparingly. (Source: TransUnion website)
4. Regularly check your credit report: By regularly checking your credit report, you can identify any errors or fraud that may be impacting your credit score. You are entitled to a free credit report from each of the three major credit bureaus once per year. (Source: AnnualCreditReport.com)
5. Use different types of credit: Using a mix of credit types, such as credit cards, auto loans, and mortgages, can also positively impact your credit score. This shows creditors that you can manage different types of credit responsibly. (Source: myFICO website)
6. Keep old accounts open: Closing old accounts can shorten your credit history and negatively impact your credit score. Keep old accounts open and use them occasionally to show credit activity. (Source: Credit Karma website)
7. Avoid maxing out your credit cards: Maxing out your credit cards can signal to creditors that you are financially overextended. It is best to keep your credit card balances below 30% of your credit limit. (Source: NerdWallet website)
Sources:
- Experian website: https://www.experian.com/blogs/ask-experian/credit-education/improving-credit/establish-credit/
- Equifax website: https://www.equifax.com/personal/education/credit/score/credit-utilization/
- TransUnion website: https://www.transunion.com/blog/credit-advice/be-responsible-with-debt
- AnnualCreditReport.com: https://www.annualcreditreport.com/index.action
- myFICO website: https://www.myfico.com/credit-education/credit-report-credit-score-articles/types-of-credit
- Credit Karma website: https://www.creditkarma.com/advice/i/how-does-closing-credit-card-affect-credit-score
- NerdWallet website: https://www.nerdwallet.com/article/finance/credit-limits-how-do-people-get-them-and-how-do-you-change-them