Our credit report is an essential part of our lives. It informs creditors, or lenders, about how we are able to repay a loan or pay for items over time. Our job is to make sure that we present ourselves well on this report and get the best possible rate.
These surefire tips will make sure you are always on top of your credit and consistently building a great credit score. Neglecting any of these could lead to problems with securing credit or buying things you may need like a home or car.
1. Make Every Payment On Time
This tip should be the number one thing you do when repaying a credit card or loan. In the rush of our daily lives, it is too easy to forget things like credit card bills or loan payments. By not paying on time, we are accruing additional fees and adding more to our obligation.
Paying our bills on time or early needs to be your #1 priority every month. Set up an auto-pay through the online site of the credit card or through your own banking institution. Paying early will also help to alleviate any stress you may have at the 1st of the month when rent or other bills may be coming due.
2. Monitor Your Credit Report
Many of the credit reporting agencies(ex. Equifax, Transunion, etc.) allow you to monitor and check your credit report for errors. There are also 3rd party sites that allow you to do this for free(Credit Karma). Checking the accuracy of your credit report allows you to avoid some of the biggest problems we face when it comes to credit.
- Watch out for identity theft.
- Companies can and do make errors that can affect your report.
- Make sure that every loan or credit card is being reported.
- Monitor your score so that when you are ready for a large purchase, you can be assured of approval.
Monitoring your credit report keeps you on the informed about any issues you may have and allows you to correct them before your life can be seriously affected.
The United States government also wants you checking your credit report and they have given us a resource at www.annualcreditreport.com to check all 3 major credit bureaus free of charge.
3. Only Apply For Credit That You Need
The more outstanding loans you have versus the amount of income you bring in, could impact your credit score negatively. Applying for new credit also could have an impact on your credit score. When you are purposeful and condition yourself to use your credit only when necessary, you will grow your credit score much easier.
There is no shortage of offers that you could apply for, but that does not mean you should. Store cards, direct mail offers, and special financing in stores will all tempt you to buy now and pay later. Make sure to budget what money you will need for these payments before you make a decision to buy. Your credit utilization is one of the factors that determine your credit score, so use your credit wisely and when necessary.
Take Your Credit Seriously
These key tips will help you stay on the path to amazing credit. Good credit can be essential to buying things we need, renting an apartment, and can even affect the rate you pay with insurance companies. Your credit is very important and our tips will make maintaining good credit much easier.
Your success is ultimately up to you, but these tips are a starting point to great credit. Our financial lives revolve around our credit report, so make your creditworthiness a priority.