Credit can be your greatest tool in building financial security, but it
can also be your worst enemy if it isn’t managed properly. Fortunately, your
credit union can offer resources to help you learn how to take control of your credit
and use it to help you build financial freedom. These dos and don’ts
will also help you master credit management.
DON’T Miss Payment Dates
Paying your credit cards and loans on time is one of the best things you
can do to build a strong credit history. A single late payment, on the
other hand, can significantly impact your score. Set a reminder on your
phone or set up email reminders with your creditors so that you always
know when a payment is due. Be sure to work payments into your overall
budget so you are never caught by surprise without the money to pay.
DO Pay More Than The Minimum
The longer it takes you to pay off debt, the more expensive that debt becomes,
because it is accruing interest that you need to pay. Paying more than
the minimum required payment lets you pay off debt faster and save money.
Likewise, because the ratio of your debt to your available credit is a
big component of your credit score, paying off your debt faster will give
you a more positive credit history.
DON’T Close Your Credit Card Accounts
This may sound counterintuitive, but closing a credit card account, even
if you haven’t used it in years, can have a negative impact on your
credit. When you close an account, you lower the amount of credit you
have, which can negatively impact your debt to credit ratio and diminish
your score. However, that doesn’t mean that you should apply for
new accounts to increase your available credit either. Applying for new
credit can harm your credit score as well.
Let the experts at Westmark Credit Union help you navigate the mysteries
of credit management and leverage your credit to your advantage. Get
financial help in Idaho by calling our credit union at (208) 523-1071.