My husband and I was out shopping this weekend for a new laptop and at one of the electronic stores we met a wonderful young man. He knew his products well and was extremely helpful in our buying experience. After we determined the many things that we needed for this purchase, we began to process the in-store credit card application in order to take advantage of the promotional 18-month no interest program. I try to use these programs for all my big purchases so that I can spread the burden over a period of time instead of hitting my saving account immediately. This allows me to plan well financially for unexpected items yet have plenty of time to make sure the purchase is paid off prior to the 18-month term date. This is one of the main benefits to having good credit.
After everything was completed, the young man asked me, “How do you get such good credit?” Even though he didn’t have access to our credit score or any information other than what we were approved for on the spot, he was surprised at the quickness and the amount of credit we were given in a matter of moments. So here are a few tips to creating better credit which will allow you to create efficiencies into your financial life.
#1- ALWAYS pay all your bills ON TIME!
#2- Keep your balances on all your credit cards less than 35% of the over credit limit.
#3- Do not spend more than you can pay off at the end of every month. If possible, pay off all your balances EVERY month.
#4- Get a “secured” loan (i.e. car loan, home equity loan) to help build your credit.
Here are a few additional items that will help you get a loan but doesn’t necessarily build your credit score:
-Utilities in Your Name
However, keep in mind if you over draw your bank account or do not pay your utilities on time, it can have a negative effect on your credit when they report your account delinquent to the credit agencies.
The best thing you can do to start building credit is to live within your means. Creating good credit takes time. Your credit is based on a number of factors such as length of time you’ve had credit and payment history. So it is extremely important not to just establish credit but to also maintain good credit. This will open many doors for opportunities to financial security.
If you have any questions, comments, or suggestions of topics that you would like me to discuss in the future, please use the comment section below! 🙂