How to Protect Your Credit

Building good credit takes time. Protecting it is just as important.

In one quick instance, whether it’s identity theft, a stolen credit card or a missed payment, your hard-earned credit can take a hit. There are a few simple things you can do to protect your credit and avoid problems down the road.

1. Freeze Your Credit Reports

Freeze your credit reports with Equifax, Experian and TransUnion when you aren’t actively applying for credit. A credit freeze can help prevent someone from opening new accounts in your name if your personal information is stolen.

You can temporarily lift the freeze when you need to apply for a mortgage, credit card or other new credit.

2. Report Lost or Stolen Cards Immediately

If you notice a card is missing or see a charge you don’t recognize, contact the credit card company right away. The sooner you report it, the sooner they can lock the card, investigate fraudulent charges and issue a replacement.

3. Don’t Close the Account When a Card Is Stolen

If your physical credit card is stolen, report it rather than simply closing the entire credit account.

The credit card company can typically close the compromised card number and issue a new card while keeping the underlying account open. This helps protect your account while preserving its credit history. If you do close an account, make sure there isn’t a remaining balance or pending charge. Even a small unpaid balance can eventually result in a late payment and have a significant impact on your credit score.

4. Put Your Credit Accounts on AutoPay

Set up AutoPay for at least the minimum payment on your credit cards and other credit accounts. It’s one of the simplest ways to avoid an accidental late payment. You can always make an additional payment if you want to pay your balance in full each month.

5. Keep Your Credit Card Balances Low

Your credit utilization is the amount of credit you’re using compared to your available credit. Lower utilization is generally better for your credit score. You’ll often hear that you should keep your credit card balances below 30%. That’s a good guideline, but lower is better. Credit card companies typically report your balance to the credit bureaus around your statement closing date, which may be different from your payment due date. If you’re trying to keep your reported utilization low, check your balance before your statement closes.

6. Check Your Credit Regularly

Take a few minutes at least twice a month to review your credit card accounts and look for charges you don’t recognize. It’s also a good idea to check your credit reports regularly. Your statements can help you catch fraudulent charges, while your credit reports can reveal new accounts or inquiries you don’t recognize.

A few simple habits can go a long way toward protecting the credit you’ve worked hard to build.