Practicing Good Credit Habits

 

Build Good Credit in a Few Easy Steps

In order to live a comfortable and relaxed lifestyle, having good credit is essential. Building and maintaining a good credit score means that you need to practice good financial habits. Not sure how to do this? Here are a few basics.

  • Only charge things on your credit card that you can afford. Similarly, only borrow money that you know you will be able to pay back. This will ensure that you do not find yourself with debt you cannot repay. It also sends your future lenders and creditors the message that you are responsible and reliable with credit.
  • By charging things on your card that you can afford to pay means you won’t have any trouble paying your full balance each month. Paying your bills on time shows that you are dependable and will help your credit history improve.
  • Pay more than the minimum payment on your card every month. This will help you to stay up to date with payments.
  • Do not max out your credit card. Stay below 30 % of your credit limit. As a result, your credit history will look good, especially if you are in the market to buy a new home or car.
  • Schedule automatic payments. Every credit card company offers this method of payment. The money will be debited from your account on the due date. Automatic payments will help you avoid late payments and unnecessary charges.
  • Register for the card’s website. Banking online is faster and much simpler. You also have the added benefit of checking your balance online whenever you want. It is a good habit to check your balance once a month to make sure there is no unusual activity.
  • Use just one credit card. Too many cards can make you accumulate more debt. Excessive payments mean that you might not be able to keep up with the payments. You don’t want to fall behind with your payments because it may lower your credit score.
  • Keep your older accounts open because they may increase your score. Firstly, creditors and lenders will be able to see your long history of prompt payments through your older accounts. Secondly, long standing accounts will build your “credit age” which contributes considerably toward positively building a credit score that will work in your favor.

Being responsible with your credit equals no debt, no worries and no stress. By practicing these good habits you will feel content knowing that you are in control.

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