January 24, 2013
Carolyn Ell
AFC® Candidate
FINRA Military Spouse Fellow
www.financialpreparedness.org

Whether you are establishing credit for the first time or preparing to make a major purchase, building and maintaining a good credit score is important and within your reach. The better your credit score, the better the interest rate you will qualify for when buying a car, applying for insurance, or hooking up your utilities.

Know Your Score: Save Money

The most significant factor in maintaining a good credit score is paying your bills on time. Thirty-five percent of your credit score comes from your payment history. This includes paying your bills on time and paying at least the amount owed on each statement. If you have been past due on your bills in the past, the best thing you can do is get current with them and remain current.  And if you know ahead of time that you won’t be able to pay a particular bill on time, you should contact your creditor and let them know. 

Be the Early Bird
If you have a relevant, working budget, you will know what funds are available to pay your existing debts. These debts need to be paid on time every month. Even if you are only able to make the minimum payment, paying your bills on time each month will establish a solid payment history. If possible, cut back on miscellaneous expenses so that you can pay more than the minimum due and pay off your debts quicker.

Do Play Catch Up
If you have some missed payments, catch up with these as soon as possible. Try calling your credit company and explaining your situation. Let them know that you want to make up these payments and ask if they are willing to lower your monthly payments over the next few months until you can get caught up. They want your account cleared as much as you do.

No New Debt
While working to pay off existing charges, try not to take on new debt. Keep spending within your budget, maybe even cutting back on nonessential expenses to increase the amount you can use to pay back on your debts. And each time you pay off one of your debts, roll that payment into your next largest debt. With the increased payments, you will pay off the balance due even faster.

6 Tips to Get a Handle on Debt

Paying debts on time is the largest factor in building good credit. If you do get behind, don’t worry. Make up late payments, keep them current on your future payments, and you will get your credit back on track.

For more information:
5 Resolutions to Get You Saving in the New Year
Do You Know the True Cost of Debt
7 Simple Savings Strategies

Tip of the Day

  • Written by Guest Blogger | April 29, 2014

    It's important to know your #credit score and what's on your credit report. Find out why it matters: http://ow.ly/whNQl 

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