You’ve put in the work to get your credit to a good place. You feel you shine in most of the five areas that make up a strong credit profile — you pay your bills on time, maintain a good debt-to-credit ratio, have a variety of credit accounts (and have had some of them for many years), and limit the number of credit inquiries on your account. But now that you’ve got that good credit score, it doesn’t mean you shouldn’t keep aiming higher.
“If you work to build a good credit score and then stop paying attention to it, your score can slip even if you aren’t doing anything ‘bad’ like missing payments or maxing out your credit cards,” according to an email from Thomas Nitzsche, the media relations manager for ClearPoint Credit Counseling Solutions.
Here are six reasons why you should keep improving your credit, even if it’s already quite good. (And you can keep an eye on how you’re doing by viewing two of your credit scores for free, updated every 14 days, on Credit.com.)
1. Gives You a Buffer
“The higher your score, the more buffer you have if something bad happens financially,” Nitzsche said. “For example, if your score is just barely ‘excellent’ and you miss a couple of payments you might drop down to a ‘fair’ score. Whereas, had you started with a near-perfect score, you may only drop down to a ‘good’ score.”
2. Puts You in a Better Position to Close a Credit Card (If Necessary)
You may be looking to close a credit card you don’t use, especially if it comes with an annual fee, but doing so could hurt your credit score (the amount of credit you have in relation to your debt, also known as credit utilization, makes up 30% of your credit scores).
“If you’ve been actively raising your already high score as you go along, even if your score drops following that card closing, your score will remain high enough to obtain new credit when you need it,” Barry Paperno, a credit expert who blogs at Speaking of Credit, said in an email.
3. Helps You Develop (& Maintain) Good Habits
“Improving your score really is a lifestyle more than a one-time action,” and maintaining the good habits necessary for a high score can help you preserve your healthy credit profile for a long time, Nitzsche said.
4. Teaches Those Around You Good Habits, Too
Whether you’re setting an example for your kids or you’re helping your spouse better understand finances, having good habits of your own can really influence those around you.
“The ongoing work of maintaining a good credit score is also an important habit that your dependent or partner can learn from when you make it part of your routine,” Nitzsche said. “This can benefit others around you in the long term by having financial conversations and preparing them for a brighter financial future.”
5. You’ll Have Better Approval Odds
“Every creditor sets its own score requirements, so in most cases you have no way to know if your score will qualify for approval without actually applying,” Paperno said. “By ensuring your score is as high as it can be, such as by always paying on time, keeping card balances low and limiting new account applications, you can apply for credit when necessary without having to worry about whether you’ll be approved or denied.”
6. May Be Able to Help You Land Your Dream Job
Some employers look at a version of your credit report as part of the application process. So, just like you (hopefully) polish up your resume before applying for a job, having a shiny credit profile can be impressive.
“Although the credit score is not a consideration when being interviewed for a job, the factors that contribute to a healthy credit report can influence an employer’s hiring decision in some states where it is legal for them to include a credit review as a part of their hiring process,” Bruce McClary, vice president of public relations and communications for the National Foundation for Credit Counseling, said in an email.