March is Credit Education Month! The best way to celebrate is to take charge of your credit habits. Learn more about how you can improve your credit standing below.
Establishing Good Credit
In order to repair your credit score, establish smart financial habits from the beginning.
- Apply for a secured credit card, which works similarly to a credit card. The major difference is that the card is secured with a cash deposit that is typically the same amount as your credit limit. A secured credit card is a precursor to an unsecured credit card which has greater benefits and untethered to a cash deposit.
- Apply for a credit-builder loan in order to help you build credit. Credit-builder loans work similarly to a savings account—the borrowed money is held by a lender until the loan is repaid in full.
Repairing Bad Credit
- You cannot fix a poor credit score overnight, but you can take certain steps to improve your credit in the long run.
Meet with a credit counselor. A credit counselor can help you understand how you may be damaging your credit and how you can improve your credit and overall financial habits. - Don’t close multiple accounts after they are paid off unless there is an annual fee. It is better to keep these accounts open and paid-off because it shows that you have an established credit history. This should go without saying, but don’t open unneeded credit accounts.
- Get current with missed payments. The later a payment, the more likely that it will be reported to a credit bureau.
Maintaining Good Credit
It is much easier to maintain good credit than to rebuild it.
- Make every payment. Stay ahead of your finances by making every bill payment on time, from loan payments to utility bills to driving citations and more.
- Check your credit score on a regular basis. Multiple credit agencies offer free credit score reports. Take advantage of them in order to maintain an error-free credit report.
- As a good rule of thumb, keep your credit utilization on the lower side. If you are unable to pay charges back in full each month, refrain from using over 30% of your credit limit.
- Understand the powerful value of a good credit standing. A good credit score can help you gain access to better loans, rates, and so much more. Take a look at how credit growth can affect every stage of your life at Credit Karma.
For more information on growing your savings and checking accounts as well as gaining loans for all your financial needs, visit We Florida Financial.