There are only a few things that you can truly call your own, and one of them is your good credit. Financial choices we make from the time we get our first job help determine if we are creating a good or a bad credit history. Here is some advice to start establishing good credit card habits.
There are many reasons why someone will have bad credit – marriage, divorce, lack of knowledge and just plain old poor choices. But, even with such a past, you can still work today towards building good credit habits that can help to repair your credit. And, if you are just embarking on the ship of credit, you can help yourself to sail smoothly.
Get out of the spending mentality – It is all over the place; television, radio, billboards and magazine ads all beg us to buy something from them. People buy when they don’t have the money to back it up. That is the first no-no that will always get you in trouble. Instead of looking to spend, look to save. Leave the credit cards at home and only travel around town with cash. With a limited amount of funds, you will think twice or three times before making any purchases.
Try to carry only one credit card – This card will serve you better if it is a major credit card like MasterCard or Visa and not a department store card. Having at least one card can begin to establish your credit history. With the interest rates on many cards soaring, shop around to find the best deal. Benefits to you include 0% APR for the first 12 months, low fixed interest rate after the first year, and earning points on purchases made with the card.
Pay your bills on time – This goes for the usual and customary household bills and not just credit cards. Paying your utility, cable, mortgage and car payments on time also establish you as a good credit risk. You may need that when moving to a new city, trying to lease an apartment, buying a house or even buying a car.
Don’t charge more than you can pay – It is a good feeling when you can pay off a credit card. Think of the feeling you’ll have when you can settle up at the end of every month. When you buy using credit, keep your expenditures to a small percentage of the credit limit you have been given, say twenty percent. Budget in for these payments at the end of the month.
Invest in your future – This comes in the form of buying a home. Homes build equity over time. Before you take out a second mortgage, you can consider a home equity line of credit which is one way of protecting your assets.
Having a good way with credit and spending bodes well for your future. When you are seen as a good credit risk, it is easier to qualify for loans, get the money you need and enhance your life. If you have gotten over your head in debt read some Tips to Reduce Your Debt.
There are only a few things that you can truly call your own, and one of them is your good credit. Financial choices we make from the time we get our first job help determine if we are creating a good or a bad credit history. Here is some advice to start establishing good credit card habits.