Tips on How to Manage Your Credit Card and Score

We live in a world where we are no longer carrying cash and let’s face it, it’s more convenient to swipe a card. We are going to discuss a few tips to ensure that you are managing your credit with good health. Some may ask, what’s the use for credit? Most people need to have good credit to buy a house, vehicle, get loans from the bank and purchase property, rent an apartment and etc.

A few ways to keep your credit score in good condition;

  • Checks credit report and credit score often.
  • Uses 1 credit card responsibly.
  • Pays all bills by due dates every month.
  • No balance or small balance on credit card.
  • Saves cash; has an emergency fund.
  • Aware of student loan payment dates and pays on time, when applicable.

This is how your credit goes down the drain;

  • Never checks credit report or credit score.
  • Uses no credit cards or uses many credit cards.
  • Makes late payments and has other unpaid debts.
  • Carries balances higher than 35% of total credit available.
  • Charges emergencies on credit card; no savings.
  • Ignores student loans or miss payments and deferment dates.

  A Few Key Tips for Good Credit

 

Have Only One Credit Card:

Honestly, there is no use for multiple credit cards, have one emergency card that has good interest rates, and great payment plan. A tip to increase your credit score is to make small purchases and pay the bill then pay your credit card bill ON TIME assists with increasing credit score.

Have Good Credit Discipline:

Whether you obtain a secured credit card or a store card, pay the bills on time. If possible, try to pay more than the minimum towards the credit card bills. This will not only help you pay off the debt but build your credit score as well. If you can maintain an outstanding balance of less than 10 percent of your credit limit, you will likely earn points towards your credit score.

Obtain a Secured Credit Card:

Obtaining a secured credit card is also a great option for young adults to reestablish their credit scores. Many of them who have a good steady job have enough cash on hand but little or no credit history. For them, a secured credit card can be a great remedy.  A secured credit card is a type of card backed by a savings account as collateral on the credit limit available with the card. So if you decide to put $500 for a deposit, this will be your credit limit. That means in the event you should default on bills, the balance will be covered by the deposit made. Therefore, this card will always let you stay current on your payment and hence, will improve your credit score.

Monitor It:

CreditKarma.com also offers free credit monitoring, which will alert you if there are any major changes on your report. It can help you prevent identity theft, which can be severely damaging to your credit. Therefore, be sure to check often.

Save an Emergency Fund to Protect Your Credit:

Charging emergencies, such as car repairs, home repairs and medical bills, can build up your balance and make even minimum payments difficult, harming your credit. Instead, work toward saving at least $1,000 in emergency cash as a start instead of relying on a credit card.

So, there you have it do not use it unless completely necessary. There is nothing worse than spending money on a credit card and unable to pay it back, that is when trouble arrives. So please…spend responsibly!