Do you want good credit? Never do this one thing!
If you don’t have a good credit score, everything in life becomes much more expensive.
Want a good job, a house, decent car insurance and respect? You have to get and keep a good credit score. Companies that you want to do business with, including the ones you may want to work for, as well as your insurance, internet and telephone all check your credit.
It’s not fair at all, as insurance rates should be based upon your driving history, not your credit history, but at this point, it is what it is.
The worst thing you can do to your credit rating is have late payments. [i] Late payments are the most important “scoring weight” in all the major four factors which include on-time payments, using too much credit (high balances), trying to get too much credit at one time, and defaulting on payments.
Even missing one payment can reduce your credit score dramatically. Do all that you can do to make your payment on time, even if it is the minimum payment. Of course, it’s never a good habit to only make minimum payments as your debt can spiral out of control rather quickly. But if you have an emergency, that might be the only option you have. You can also call your credit company to inform them of a late payment, and it’s possible that they may give you a grace period or a lower payment.
Keep good credit habits. Try not to overspend with your credit and as a rule, don’t buy anything that you can’t pay for in cash, other than a house, a car, and your occasional emergencies.
Keep a good budget. Start a small savings habit. Even a tiny savings of $1000 will mean that you can cover most emergency repair costs. With just $25 per week, you can put away $1200 per year. Before you buy something new and shiny, ask yourself if you truly need it.
Good credit can be yours if you are responsible and stingy in the use of your credit. Make your payments on time, use very little (or no) credit, have a few accounts for a long time, and don’t default.
As always, I’m not a financial advisor. This article is for entertainment only. Consult your licensed financial advisor for any financial advice and always do your due diligence.
