Managing your credit can seem confusing, but it doesn’t have to be. While every person’s individual credit profile is different and should be managed in its own way, there are a few basic steps that everyone can focus on to help effectively manage credit.
1.Pay your bills on time. Late payments, collections, and judgments have a large negative impact on your credit scores.
2.Manage your debts. Keep the balances on your credit cards as low as possible. By keeping your balances below 10% of the limits, you will help to ensure better credit scores.
3.Give yourself time. The length of your credit history has a significant impact on your credit scores. Establishing a long history of paying your bills on time and using credit responsibly will help to build healthy credit. Always try to keep your oldest accounts open to lengthen the time of active credit use.
4.Apply for credit in moderation. Opening too many new accounts within a short period of time causes inquiries to appear on your credit report. This can be interpreted as a sign of financial difficulty and lead to you being a higher risk to potential lenders.
5.Monitor your credit regularly. Utilize on-line services that allow you to see your credit such as AnnualCreditReport.com or Credit Coach. This will help you check for inaccuracies that may appear on your report and avoid identity theft.
Look at the past two years and use that as a tool to focus on the next two years. If you have good credit, keep doing what you have been doing. If your credit isn’t up to par, learn from what you have done and develop a plan for what you can do to rebound. Following these simple steps can help in the process of building healthy credit and lead to a better financial future.
Article taken from Credit Coach blog: http://creditcoachblog.net/
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