There’s no arguing that a good credit history is an advantage for everyone. An impressive credit report gives you the power to negotiate with lenders and demand lower fees. This article presents 5 practical and efficient ways to build and maintain a good credit history. Check out the following tips on how you can show an impressive credit report to prospective creditors.
Building Good Credit History with your First Credit Card
Go for low interest credit cards. With all the many choices of credit cards in the market, you’ll want to find one that not only offers low interest but reasonable terms as well.
Be cautious with the use of credit cards. It is definitely easier to shop using a credit card but the difficult part comes with the repayment. Remember, carrying over your balance from month to month can result to debt build-up. Late fees can also affect your credit score. To keep your credit in good standing, you need to be watchful with how you handle your credit card.
Don’t use up more than half your credit limit. It is a big no to exceed your credit limit. Nevertheless, this doesn’t mean you should use your credit limit to the full. To be safe, use only 40% of your credit limit and leave the rest free.
Pay your credit card balance in full every time. To avoid bad credit, make it a habit to pay your credit card balances in full each month. Doing so will save you from the additional interest rate and late penalty charges. More importantly, you protect your credit report from any negative records.
Manage your credit card balances correctly. Sometimes, you may need to use your credit card for larger purchases. If you need to maintain a balance on your credit card, try to pay more than the minimum each month so you can finish your payments at a sooner time.
Check your credit report regularly. Obtain a copy of your report from the three major credit bureaus at least twice a year to ensure that it’s accurate and free from errors.
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