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Simple Tips for Great Credit

Learning about the basics of credit scores and how it fluctuates can be a difficult task. There are some tips on how you can successfully deal with your personal credit score.

Once a little bit of homework is done, you will be able to understand beneficial practices to keep your credit score in good standing and what to avoid to keep it in this state.

What not to do:

  • Do not buy more than your comfortable budget if you know you will not be able to pay the balance within a reasonable amount of time. This is the main reason that people experience financial difficulty and end up with lower credit scores. Be careful when using your plastic cards for purchases.
  • Keep the number of credit cards you have to a minimum. Do not accept a level of credit that is not necessary. Some financial institutions will offer incentives such as gift merchandise but do not fall for this especially if more credit is not required. Having too many credit cards will not improve your credit score. It may hurt it in the long run.
  • Set a limit that you can comfortably afford to charge. Knowing the amount you spend will allow you to control the credit limit and spending ratio. If you spend $1000 every month, the credit limit should be $2,000. Hitting the credit limit and not paying the balance as required with decrease your credit rating. A payoff of the balance when near the credit limit will also affect your credit scores.
  • After being denied credit, do not shop around for another provider. This information appears on the credit report through various reporting agencies and can decrease your credit score. Get a copy of your credit score to determine the reason for the denial. Eliminate the problem and improve your score prior to applying to other financial institutions.

What you should do:

  • When your bill arrives, pay off a majority of the debt or all of it. This is extremely important. Leaving a balance is not recommended as interest will accumulate and increase the monthly payment to a level that may cause financial difficulty. There are no benefits to leaving a balance on a bill.
  • Do not leave your credit card unused. It should be used periodically to create a credit history and in turn, increase your credit score. Any credit card you have can be used in various ways such as for food shopping, clothing and personal amusement.
  • Always avoid payment delays and pay when the amount due to the creditor prior to the deadline. Even if the payment is slightly delayed, this information is reported to the credit bureaus and can lower your credit reputation.
  • If you are having difficulty with meeting your financial obligations, there are many counseling services who can help to fix your credit difficulty and offer alternative payment methods. Do not let this issue worsen. Seek help immediately prior to destroying your credit history.

Individuals who do not have a satisfactory debt payment history will have difficulty with finding loans when and if they decide to obtain a mortgage for property purchases. The rates will be much higher compared to those who have excellent credit. In some cases, the interest rates may be double. When you do a calculation of the amount of interest, the amount that is paid adds up to quite a fortune.

The steps above are very easy to take and will help protect and maintain a high credit standing. Do not collect more credit than necessary to prevent going “overboard” later. Your credit rating must be protected in order to improve your lifestyle and obtain credit later for some of the most important purchases a person can make.

 

Call us today and ask any questions that might be on your mind at (416) 663-5444
Alternatively you can write to us here and one of our Counsellors will be happy to assist you.
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