Credit Basics 101
What You Need To Know About Credit

Good Credit Maintenance

Maintaining good credit is important to your financial life. There are people who experience a poor credit report due to neglect and improper report reviewing. There are even others who went through the process of repairing their credit and somehow managed to maintain good credit after. If you do not want or ever need credit repair, good credit maintenance is advisable. Luckily, simple steps can help one in keeping proper maintenance of a good credit.

The Importance of Good Credit

Credit history plays an important role in determining whether you are qualified for a loan or not. The credit is really worth a thousand words and it says so much about the consumer. Not only can it affect your finances but other aspects of your life as well. Several counselors and services agree upon one thing: maintaining good credit is important in leading a fit financial life.

Most people do not realize that landlords, employers and companies check credit scores before making a decision on whether or not they can grant a contract or a job. The scores and credit report can help companies decide whether you pay your bills on time or if you have filed for bankruptcies. By doing so, they can use the information on your credit report as a future marker of your credit worthiness.

What You Can Do

Although maintaining a good credit can be quite a challenge, there is no better way to keep you safe from debt than by carefully following your spending and always sticking on a budget. Budgets are important as they can aid you in controlling your finances, decreasing your debt and building a strong credit history.

In the topic of managing your debt, the first thing you can do is to keep track of your spending habits. You can do this by creating drafts of what you spend and track anything that you might owe. Monthly statements should be reviewed when they arrive and always check for any possible inconsistencies. Additionally, always remember to report them immediately.

To keep your account in good standing, always remember to pay the creditor on or before the due date normally printed on the statement. Do not skip on any payments and strive to pay more than the minimum or, if possible, pay the whole balance each month.

Another step you can take is not to exceed your credit limit. The available credit is the amount left on your credit, it's usually represented by the difference between your credit limit and your outstanding balance. Always remember to maintain the balance lower than the limit of the credit. Additionally, make sure to add any charges you made after the closing date to your outstanding balance included in the monthly statement; doing so can help you find out just how much credit you have left.

Sticking to a budget is also important. Typically, 10% of your monthly income should be used in paying your credit lines, bills or personal loans. However, in case you are paying more, it is time to reconsider your habits of spending. Keep away from impulsive buying since it is especially hard to pay off.

Lastly, control your finances. It is advisable to create a payment plan, which can help you get on the right track. This kind of scheme should incorporate those whom you need to pay and the amount of the payment each month. Normally, other people limit their credit usage until the finances are under control; this is an excellent method of controlling your finances.



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