Secure Your Financial Future By Building Good Credit

Building and maintaining good credit is important in managing personal finance.  The reason for this is obvious since banks, lending companies, and financial organizations determine a person’s credit-worthiness based on his/her credit history.  Aside from creditors, employers and landlords are also known to inquire credit history to check a person’s background and credibility.

It is safe to say that good credit history and excellent credit score can open more doors of opportunity, when it comes to financial matters.  What advantages can you enjoy if you have good credit?  First, getting approved for a credit card, a loan, or other types of credit will be much easier if you have good credit.  Needless to say, lenders prefer customers with exemplary credit history than customers with blemished credit.

Getting quick approval is not the only benefit you can enjoy if you have good credit.  It is also worth noting that lenders reserve their best deals to customers with a better credit score.  Hence, the higher your credit rating is, the lower the interest rate of your loan would most likely be.  In fact, you can take advantages of your personal credit when negotiating with creditors.

Do you have good credit or do you currently have a problem with your personal credit history?  Let’s take a look at the ways on how you can build and keep your credit score in good standing:

Use your credit card for small purchases.  You can boost your credit score by using your credit card regularly. However, this does not mean you should be careless with your spending.  Keep in mind that you don’t need to carry a large balance in your account to boost your credit score.  What’s more important is to pay off your monthly charges in full and on time.  By paying your full balance each month, you can avoid interest rate charges and improve your personal credit as well.

Pay all your bills on time.  Aside from paying off your credit card balance on time, you should also be prompt in paying all your bills especially if you live by yourself.  Pay off your electricity, internet, cable and phone bills on time or you can also arrange for automatic payment to make sure that you won’t miss a single due date.  Keep in mind that 35% of your FICO credit score is based on payment history.  If you are frequently late in submitting your payments, you will not only incur late fees, your credit score will also suffer.

Pay off your student loan.  Once you graduate, it is your responsibility to pay off your student loan but this does not mean you should wait until you graduated before taking action.  Even while in college, you can start paying down the interest rate of your student loan to cut down your debts one small step at a time. Thus, when you’re ready to find a full-time job, you can complete your student loan repayment at the soonest possible time.

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