Surviving Inflation 101: Maintaining Good Credit

With rising inflation and a tough job market, it feels like everyone is struggling in this economy. The number of layoffs this year has been staggering, and surviving both inflation and the broader economic challenges can seem impossible. Many people are finding it difficult to keep up with rent, utilities, and basic living expenses. So, how do you make it through? Living paycheck to paycheck isn’t ideal, so let’s talk about one way you can improve your financial situation—by maintaining a good credit score.
Good credit can open doors to better job opportunities, housing options, insurance rates, loan approvals, and much more. In this article, we’ll cover everything you need to know about credit scores, including what they are, why they matter, and how you can maintain them. Ready? Let’s dive in.
What Is a Credit Score?
A credit score is a numerical reflection of your credit behavior, based on factors such as how consistently you pay off debts. Do you make your payments on time? Or are you often late? These behaviors are compiled into your credit score.
The higher your score, the better your credit behavior appears to potential lenders and employers. A high score signals to banks and other financial institutions that you’re a trustworthy customer—someone who is likely to repay loans responsibly.
What Does a Good Credit Score Look Like?
A “good” credit score can vary depending on the scoring model, but generally, a score of 800 and above is considered excellent. If you’re unsure whether your score is in a good range, consider contacting your bank or a financial advisor for a detailed assessment.
Why Should I Maintain Good Credit?
Maintaining a strong credit score offers several important benefits, including:
1. Better Loan Approval Rates
When you apply for a loan, your credit score plays a major role in whether the bank approves or denies your application. A high credit score indicates that you’re financially responsible, making it more likely that your loan will be approved. Whether it’s a mortgage, car loan, or personal loan, a good credit score increases your chances of securing the funds you need.
2. Access to Better Housing Options
Looking for a new apartment or home? Realtors and landlords often check credit scores as part of the rental process. A good credit score signals to them that you’ll reliably pay your rent. The better your score, the more housing options you’ll have available to you, and it can even help you secure a better rental rate.
3. Employment Opportunities
Many job applicants overlook this, but some employers check credit scores during the hiring process. A strong credit score reflects responsibility and financial stability—qualities that employers value. Keeping your credit score in good standing can give you an edge when applying for jobs.
How Do I Maintain a Good Credit Score?
Now that you understand the importance of a good credit score, how can you maintain or improve yours? Here are some key steps to take:
1. Pay Your Bills on Time
Timely bill payments are one of the most important factors in maintaining a good credit score. Late payments can significantly lower your score, so consider setting up reminders or using a spreadsheet to track your due dates. Paying your bills on time shows lenders that you are dependable and responsible.
2. Stay Below Your Credit Limit
Another important tip is to keep your credit usage below your limit. Try to use only a portion of your available credit each month—ideally less than 30%. Regularly tracking your credit limit can help you avoid overspending, which will protect your credit score.
3. Review Bills and Statements Carefully
Sometimes, banks and credit card companies make mistakes. Be diligent about reviewing your statements before making payments. Check that all charges are accurate and that there are no errors in your bill. Catching mistakes early can prevent unnecessary hits to your credit score.
The Takeaway
Maintaining a good credit score is crucial for surviving the current economy. With inflation on the rise and layoffs affecting many, a strong credit score can make it easier to navigate financial challenges. By paying bills on time, staying below your credit limit, and carefully reviewing your statements, you’ll be better positioned to handle whatever the economy throws your way.