Being smart about your credit can allow an individual to feel better about the financial situation that they are in. One should strive to be smart with their credit no matter if they have credit established or if they are working on building credit up. Either way a consumer can work to make credit better for them.
First, lets discuss how you can be smart with your credit if you have already established it. One helpful tip is to call your credit card companies and try to get your credit card’s interest rate lowered. Many do not know this, but some banks are willing to negotiate what the interest rate is on a card. They do not advertise this since everyone wants a lower interest rate but many think that they are set in stone. Contact the credit card company or bank and ask to speak with a manager. Let them know that you are not satisfied with the current interest rate and think that you may be transferring the balance due to a card with a much lower interest rate. Many times the bank or credit card company does not want to lose business, so they will often lower the interest rate.
Paying the credit card full balance is also a way to stay smart about credit. This is often easier said than done but it should be happening more. If you can not afford to pay off the balance in full, then pay more than the minimum amount. Look at the credit card statement when it arrives. Many times there is a box that says if you pay the minimum due, you will have the bill paid off in X months if no more purchases are made. Under it, it should give another amount, and state that it can be paid off in fewer months with that amount. Strive to pay at least that amount.
Always pay your bill on time. Paying late will not only give an additional late charge on the account, it may also up the interest rate on the account. If you should have trouble paying on time, set up automatic payments. By signing up with autopay, you can ensure that you will never miss a payment again. Do note that autopay usually only takes the minimum that is due.
Another thing to do to be wise about your credit is ask the credit card company if you can set your own due date. This will allow you to make sure that your payment schedule from your job corresponds with how you pay your bills.
If you have more than one credit card, then use the card that will give you the most benefits back. If you have to get gas and must use a credit card, use the card that will give back the most in rewards. Some cards offer so much for gas, groceries, and entertainment. Make sure you know all the values of your cards, and shop wisely with them.
Now if you do not have any credit established, it can be hard to get credit. But there are some smart moves that can be made to stay smart with it. First off, do not apply for too many credit cards at once. This is a red flag to lenders that you are not as responsible as you should be, and they may not extend credit to you.
Pay all bills on time. Every bill that is due, if late, could go on your credit report. This will lower your score, and make it much harder for credit to be given to you. Aim to pay all minimum amounts that are due before or by the due date. If you have been late with a payment, work to get current so credit gets built back up.
No matter if you have credit established or are working on getting it built up, it is a good idea to check your credit report at least once a year, if not more. A credit report is a statement that lets lenders know what the likelihood is of a consumer paying them back money that was borrowed. A free credit report can be obtained once every 12 months from the 3 major credit bureaus (Experian, Equifax, and TransUnion). Federal law requires each bureau to give one free copy. An individual can order a copy from all three places at once or spread them out over the course of a year to look at. When examining the credit report, make sure that all information is correct, and that no late fees or charges were added to your account. Make sure that all addresses are correct and that only inquiries that you have made are on the report. If you should find that there is incorrect information on the report, contact the bureau that the report was obtained from and dispute any information that is incorrect. The credit bureau will have up to 45 days to alert you of their findings. They will either correct the problem or state that they did not find out anything wrong with the report. Should they say there is nothing for them to fix, you can ask them to place a note with your credit report stating that you disputed certain information on the report.
Being smart with credit will allow one to be able to build up the credit that an individual should want. Even if you do not have any credit, you can still work to be smart about it. Being smart about your credit will allow a person to be more successful financially.