One of the many ways we are “defined” by society, is by our credit score and history. Your credit information has a very significant impact on not only your personal finances but also a majority of your life and different events you may experiences, such as buying your first home. The first step in credit management is establishing your credit score. Once this is done, it’s important to remember that you’ll want to continue to build your credit up in various ways; you can do this by gradually making small credit charges or larger transactions such as financing or leasing your first vehicle. Always remember that any credit charges you make need to be paid back within a specific period of time, and late payments can negatively impact your score, as well as result in late charges and higher interest payments. Here are some great tips for boosting your credit:
Make Payments On-Time
Whenever you make a credit charge, you should keep the payment due date noted somewhere where it will help you remember. Credit cards are a great tool for boosting your credit when they are used properly; however, they can do more harm than good when they aren’t managed correctly. Any credit card charges you make should always be paid on early or on time. This will give you a good rapport with the credit company, as well as boost your score. You’ll also avoid any late charges, and you’ll have a better chance of getting future credit cards and other purchases with low-interest rates.
Avoid Making Minimum Payments
While minimum payments are an option that you’ll usually see when you’re making a payment, it’s best to pay your bills in full if you can. Minimum payments tend to extend your payback period, as you’ll incur interest that can sometimes make a minimum payment useless. Do your best to make any payments in full. If you’re unable to make them in full, try to pay back well over the minimum, to tackle the balance the best you can.
Address Any Late Bills or Payments
Late bills or payments can happen sometimes. As humans, we forget, and it isn’t uncommon. You may have changed bank accounts or hit a financial hardship that caused you to get set back on some payments. If that’s the case, once you’re in a better financial position, work on getting any late payments or bills settled as quickly as possible. This will help bring your credit score back up if it’s taken a hit recently.