5 Effective Habits of People With Good Credit Scores

It does n’t take a fat bank account to secure your financial status. All you need is a shrewd mind for money and a good credit score to boot. Don’t worry if you’ve got a lousy score right now. Here’s a list of effective habits to help you recover from bad credit.

1. Pay your bills on time. You can easily set up an automatic payment system for your credit card bills and utility bills. If possible, don’t just stick to the minimum payment. If you’ve missed some payments before, make up for it and stay ahead.

2. Avoid the credit limit. Don’t max out just because you’re allowed to max out. Keep your balances low. In fact, most financial experts suggest that you should use your credit at no more than 30% of your total credit card limit.

3. Experiment with a long credit history. Credit scores are also based on longevity or your experience in finances. The longer history you have of paying your bills on time, the better your credit risk will be.

4. Apply ONLY for credit cards that you need. At the very least, have three: one for shopping, one for emergencies, one for utility bills.

5. Think ahead. Save for the future. Regardless of how secure you are with your job or how stable your financial expenses are, you definitely need to be financially prepared for emergencies. Separate a savings account with an emergency savings account; that way you’ll have pools of accounts to choose from.
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Disasters That Lead You Straight to Bad Credit Scores

Want to keep your credit score in good shape? Here are the scenarios you definitely want to avoid:

1. Maxed out credit card limit. You got carried away shopping at Forever 21, grabbing the latest handbags and platinum pumps you could get your hands on. But then, your next purchase of a double tall Starbucks latte was declined because you’ve maxed out.

Tip: Remember to avoid reaching the limit of your credit cards because they can drastically affect your score. A certain percentage of your available credit is used to ascertain your credit score, so a low or zero balance can definitely work against you.

2. Missed payment deadlines. You received your credit card bills a week ago, but chose to ignore them because you were busy getting your nails done or catching up on the latest episode of Orange is the New Black. Now, it’s past three weeks since you got your mail and, unfortunately, you missed a payment deadline and you’re being fined a ridiculous amount.

Tip: Keep a reminder on your app, an alarm if necessary, so you’ll have weekly reminders or warning about an upcoming deadline for credits or loans.

3. Stopped using credit cards. You have been warned of the rigors of keeping a credit card and have experienced some speed bumps yourself. But stopping your use of credit cards altogether can still work against your score.

Tip: Manage your use of your credit cards wisely. If you have multiple credit cards, use them for separate expenses to avoid maxing out, i.e. one for shopping, one for emergencies, one for car maintenance, etc. Do these tips sound good to you? Share with us your thoughts!

Do you want to avoid bad credit scores, visit www.rebuildingyourfuture.com