One of the most important things you can do to set yourself up for financial success is to establish good credit. A good credit score makes it easier for you to be approved for a loan to purchase a car, home, and other expensive items at much lower interest rates. Remember: for more tips on how the improve the quality of your life, visit www.credithealing.org
Using a credit card is one way to demonstrate your ability to manage credit responsibly. Here are tips on how to use your credit card to positively impact your credit scores whether it’s your first credit card or you’ve had one for years.
1. KEEP YOUR CREDIT UTILIZATION LOW
You must keep your credit utilization low and make your payments on time to demonstrate that you are a responsible credit card holder. Monthly, your on-time payments are reported to the major credit bureaus, and they play a major role in determining your credit score.
Using your credit card responsibly also means not exceeding 30% of your credit limit. A higher credit utilization rate indicates how responsible you are when using credit cards.
2. DON’T MAKE LARGE PURCHASES UNLESS YOU CAN PAY THEM OFF QUICKLY
Unless you have the cash to pay off a large item quickly, make only small purchases with your new credit card to keep your credit utilization rate low. In case you decide to put a large payment – such as a down payment on a house or car – on your credit card, make sure you can use funds from your savings account to pay off your bill quickly.
It’s important to remember that putting a large amount on your credit card can negatively impact your credit score in addition to charging you interest. With a lower credit score, you may be charged a higher interest rate on other purchases.
3. MONITOR YOUR CREDIT
Monitoring your credit report is another way to track how purchases and payments on your credit card affect your score. When planning for your future financial goals, it is important to have a credit report monitoring service provide you with your credit report and scores.
Credit and identity protection are also offered by many credit report monitoring services. If your credit card is lost or stolen, you’ll receive alerts about suspicious activity on your card. Sign up for credit monitoring today!
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