How To Maintain Good Credit Scores
Most people with average incomes are struggling to meet their financial expenses
. Such people tend to swipe their credit cards a little bit more often than they should. Eventually, this adds to their total debt. Interest payments can rise far higher than is healthy for the average budget. It's not easy to break this habit, but it's absolutely critical to maintain a good credit score, especially in an economy like this.
If you already have a good credit score, then consider yourself lucky, and take this advice to help you keep your good credit score so that you can finance your purchases much more easily.
Pay Your Bills On Time. Paying your utility bills and credit card payments on or before the due dates, are among the first things that should be on your mind whenever you're thinking about maintaining your good credit. Timely payments directly improve your credit score, and, of course, you'll pay fewer late fees, helping you in the long term as well.
Use credit cards carefully. The next thing to remember is to avoid excessive credit card use. Those of you with good credit scores have probably started to think of your credit cards as a safe way to spend money. This can quickly turn into a completely different shopping habit. When you carry cash, you're constantly aware of your balance. However, with credit cards, there's a slippery slope which can make you believe that you can spend endlessly. That slippery slope is the #1 thing that causes most credit scores, and households with good budgets, to descend into debt. The most important thing to remember about credit cards is that they will tempt you, if you have good credit, to make luxury purchases. The first time you spend beyond your income using a credit card for a pleasure purchase, you're risking trouble. Establish good habits, like waiting instead of making impulse purchases. Same up some or all of the money for those purchases that you really want. Not only will you avoid excessive credit card use, and avoid any habit of impulse spending, but you'll also pay less for the things that you do buy by avoiding paying interest. In short, use your credit card only when you really need it.
Benefit from store credit and other monthly installment programs. Here, we mean two things. First, you always need to be aware of how much you can pay each month, and how much you're already paying each month, for your credit purchases. For example, if you've already racked up a large balance on your credit cards, you need to figure out right now how much you can pay each month until you get that balance down to zero. If you've already reached a point where you're having trouble making minimum payments, approach your bank or creditor now in order to work out a good payment scheme that works for you and keeps your credit safe. Secondly, you don't always have to use your credit cards to make these purchases that you can't pay for in cash. Having a variety of credit accounts, all of which are paid down, on time, and on a regular basis, is another thing that directly improves your credit score. So, when you are going to make a purchase, consider applying for store credit rather than using a credit card.
In conclusion: Keeping a good credit score not only helps you keep a clean credit record, but also helps with future purchases. Everything from financing a new television, to financing a new car or home, becomes easier and less costly in the long run, the better your credit score is. Last of all, be aware that there is a lot of good information on the internet about how to maintain or repair your credit score. Be wary of companies that promise "help and information" but don't provide any information, instead requiring you to sign up for some kind of service. It's very easy for you to learn the basic habits both of maintaining your credit score, or repairing a bad one.
And, don't forget that here at Krebs Financial of Miami, FL, our website offers much of this information for free. Be sure to browse around and learn what you need to know.
by: DavidAKrebs
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