Michele Cagan

Other things that can cause your score to drop include:

• Not using any credit

• Mistakes on your credit report

• Canceling credit cards that you paid off

• Lowering credit card available credit

Even if you don’t plan to borrow money again (ever), it’s a good idea to maintain a good credit score because it can affect other things like getting a job and buying life insurance. If you do borrow again, having an excellent credit score will make you eligible for the best possible terms. You can maintain a healthy credit score without going into debt by regularly charging a small amount on a credit card, then paying the balance in full every month.

By pre-planning your big purchases, you’ll eliminate the urge to spend more than you intend. It’s very easy to overspend when you’re signing a loan agreement or swiping a credit card, but not when you have cash in hand.