If you’ve got a good or excellent credit score and pay your bills on time and keep your credit balances low, then maintaining that score can seem like a headache.
A credit score can be used in ways other than in determining what interest rate you’ll pay on a loan. It can also be used by employers, landlords and utility companies—with your permission—to determine if you should work, live or be allowed to sign up for electric service without a deposit.
But not all of those look at your credit score as much as you might think. There are some times when it can be OK to let your credit score drop by a few points.
For example, if you don’t plan on applying for credit in the next six months or so because you’ve already got a car and house, then a small drop in your credit score shouldn’t hurt you. You still want to keep your credit in good standing, but there is some wiggle room.
Your credit history can be more important in non-lending situations than your credit score.
For example, an employer that pulls a curated version of your credit report may be more interested in verifying a work history and if you pay your bills on time than on if you have perfect credit.
A landlord requesting a credit score for a possible tenant may not be looking at a specific credit score but for red flags such as if they’re behind on any debts. One or two late payments can be enough of a warning that they may not pay their rent. A utility company may have the same reasoning.
And here’s one bit of good news: Applying for credit cards just to get the rewards that they offer, including sign-up bonuses, shouldn’t hurt your credit score if you keep the cards to a minimum and pay them off in full each month. If you plan on getting a major loan within six months, then you may want to hold off of on the rewards cards.
To continue in maintenance mode with a credit score, start by checking your credit report three times a year for free at AnnualCreditReport.com. Look for errors, if fraudulent loans were taken out in your name, and if the payment history is accurate.
Clearing mistakes can take months, so checking your credit report every four months can help prevent you from scrambling if you do decide to get a loan or someone needs to look at your credit all of a sudden because you’ve found a new job or are moving.
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