Building Credit and a Better Life

We all know that building and maintaining good credit can make or break us when it comes to making some of the bigger decisions in life. Buying a car, a house, an RV, or even things as simple as renting a home and having a checking account are heavily impacted by that special number between 450 and 850. Credit can be a tough thing to build, but an exceedingly easy thing to destroy. Before I worked for a bank, I, like many people, knew only that credit was important, but not how to manage it. School certainly didn’t teach me, and when aked about a credit card, my parents simply responded “Don’t”. So, in the hopes of creating a more educated consumer, here are some insider tips on what really counts toward managing your credit, from someone who deals with this business every day. First, some basics.

*Make Payments On Time
Whether you are payin your electricity bill or making credit card payments, do it at least a few days before the deadline. Every time a payment on anything comes in late, it can negatively affect your credit. It might help to mark a calender with due dates after receiving billing statements, or ask your bank about setting up automatic billpay to make things totally foolproof. One thing that helps me is to have a separate checking account that budget all of my bill money into. This way, everything is set aside and I know exactly what is left for me to spend in my regular account.

*Don’t Get Too Close to Your Limit
The closer you get to maxing out a card, the more chance it is going to negatively affect your credit.

*Don’t Let Items in Collections Fester
If you screw up and end up with an item in collections, make it priority one to get that taken care of. Some lenders will still be able to work with you on a low credit score, but items in collections can put the cabash on the whole thing.

Also, here are some things I have found that most people don’t know:

*Don’t Pay Your Whole Balance at Once
It sounds like a good idea, but what creditors really want to see is that you can responsibly make payments over a period of time. Yes, this might cost you some in interest, but down the road a better credit score will help get you lower interest rates and save money.

*Don’t Close Credit Cards if You Can Possibly Help It
Every time you close a credit account, it dings your credit score. Keep accounts open until you are confident your score is solid.

*If You Get Turned Down, Wait Awhile to Reapply
Multiple consecutive inquiries on your credit shave points off your credit, too. If you got turned down once, you probably aren’t qualified for that type of product. Wait awhile, follow the rest of these recommendations, and try again.

Good credit is important, and so is knowing how to get and maintain it. With some attention to detail and careful money management, good credit is within reach.