First Person: My Recipe for Almost Perfect Credit

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I have excellent credit scores and am proud of that fact. Experian, TransUnion and Equifax are the three main credit agencies, and each of them has given me a score in excess of 800. In this day and age, when creditors place so much importance on a numerical score, I consider myself blessed to have a score in the upper echelon.

Long Credit History

I have had credit cards for over 40 years, and while a credit history usually focuses on events within the past seven or ten years, the age of an individual credit account is important, and I am fortunate that some of my credit accounts have a 20 and 30 year history. It is important to understand that the age of an account is a major component of your score and that you should try and keep your old accounts and occasionally use them.

On-Time Payments and Wise Usage

My former wife and I had mortgages, auto loans and credit cards, and we made certain that we paid the bills on time. She was a mortgage broker and understood the impact that a history of late payments could have on a person's ability to get a mortgage at a good rate. Even if we could not pay a credit card bill in full, we made more than the minimum payment and that is what the credit card agreement requires. I also used credit wisely and doubt that my credit card utilization rate was ever more than 10 percent. The credit utilization rate is the amount of credit that you are using divided by the amount available. You can determine this by adding up your credit card bills and dividing that number by the total of your credit lines. Lower is better.

Skip the 10% Discount

We have all been shopping and have been enticed by the offer of a 10 percent discount on today's purchase if you apply for, and are issued, a store issued credit card. I avoid these like the plaque. The application for credit can knock a few points off the score and how many credit cards do we need?

Live Within Means

I have always tried to live within my means and look at each major purchase long and hard before making it. That was a huge difference between my former wife and myself, I eschewed borrowing and she thought that leverage was God's gift to man. But that mindset kept me in an affordable home, allowed me to drive a nice, if not fancy car, and have a reasonably nice life.

Avoid Catastrophes

It would be foolish to ignore a major factor in my ability to maintain excellent credit scores. I have not had a catastrophic setback in life. My experience with unemployment was only three months and I had a spouse who was working, so there were no long-term consequences. My divorce was costly in terms of assets but nothing else, and knock - on - wood, my health has been excellent.

Monitor but Don't Obsess

People are entitled to a free copy of their credit reports each year, which is something which I strongly recommend. While you do not get your score, you do get a list of all your accounts and any negative remarks. I request my reports on a four month cycle which means that though-out the year, I am keeping an eye on my credit.

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