If you’re looking to make any kind of significant purchase (house, car, etc), you need to have good credit. Otherwise, you risk being declined… or, having them bog you down with an insanely high interest rate. No one wants either of those options! We can help though! Here are a few tips for building and maintaining good credit!
When to pay
It should go without saying that it’s extremely important that bills get paid on time. All it takes is forgetting to pay that magazine subscription bill, and WHAM! It shows up as a negative on your credit report. Credit lenders look for people who are able to pay their bills on time. They want to know that the people they’re lending money too, will actually pay it back. Note: If you ever hit a rough patch and can’t pay your entire bill, call the company (or companies) and explain that to them. As them to work out a payment plan with most. It’s important that you do this BEFORE the bill is delinquent. If you wait until it’s already late, they will be less likely to work with you.
When NOT to pay
If you already have seriously delinquent items on your credit report, it may be best to NOT pay those items. Most negative items will automatically be removed from your credit report, in 7 years. If it’s been 4 years since you’ve made a payment (or spoke to the creditor), then do NOT pay the bill! Why? Because once you communicate with that company (be it via phone, letter, or by paying a bill), it will show new activity for that item on your credit report – which then bumps that negative item to the top of the list (so to speak). This will actually extend the time in which a negative item stays on your credit report.
Monitor your credit
I can’t stress this enough! You MUST monitor your credit. Not only will this help you understand how credit reporting works, but it will also help you spot a possible identity theft, should strange things pop up on your credit report. You want to be on your toes. Your credit score is a big part of who you are, whether you realize it or not.
You can actually monitor your credit for FREE, using Credit Sesame. There’s no credit card needed! It’s not a free trial either. It’s a 100% FREE way to monitor your credit report and credit score. In addition, there’s a TON of info on there to help you get caught up on debt! Click here to sign up for a FREE account.
These are wonderful and powerful things. In the right hands, they will quickly build credit and show lenders that you can act responsibly with the credit line you’ve been given. In the wrong hands, a person can go seriously in debt and further tarnish their credit.
For those who are serious about fixing their credit or building their credit, a credit card can go a long way. The thing to remember is that you never want to spend more then 1/3 of your limit, at any given time. Lenders look to see that other financial institutions have extended a line of credit, but you’re using it responsibly. Going over 1/3 of your limit sends a red flag. This tells them that you’re in a rough spot and are relying on your line of credit as a way to make ends meet.
Hubby and I have a Citibank Credit Card. They have a lot of great perks and are currently waiving the annual fee! You can apply now for an instant approval by clicking the image below!