By Susan M. Keenan
Maintaining a good credit rating is a lot simpler than you might think. If you are able to follow a few basic guidelines, then you will have no trouble maintaining a good credit rating. In turn, getting credit or acquiring a loan or mortgage will be an easy task.
Strategies to follow
• Pay your bills on time every time. Even one late payment can negatively impact your credit rating.
• Keep your balances down. Don’t charge everything and anything.
• Think about the purchase for a few minutes before you actually charge the item. Is it something you need right now or can you wait for another billing cycle?
• Pay cash for smaller expenses whenever possible. A lot of small charges add up to one large bill.
• If your bill is overly large during one month, avoid using your credit card during the next billing cycle. Decreasing the credit card bill by even a small percentage will have a beneficial effect.
• Always pay the minimum amount due, otherwise, not only will you lower your credit rating, but also, you will incur additional fees.
• Pay more than the minimum amount due, occasionally, if not consistently. This helps to keep your balances down, so that you can continue to come up with the minimum payment due. Moreover, you will save on interest fees that in turn will keep the balance lower.
• Resist the urge to open several credit cards at the same time. Many stores offer incentives including percentages or a flat amount off the total purchase if you open a new credit card with them. Acquiring several cards at once can have a negative impact on your credit rating.
• Pay all of your bills on time. Bills include not only your credit card bills, but also your mortgage, car loan, insurance, and/or home equity loans. Your payment history is a major factor in computing your credit rating.
• Understand the terms of your credit cards. Know what type of default clause they invoke if you are late with a payment. Never acquire a card with the universal default clause, since they can penalize you for being late with any of your bills.
It takes much longer to repair your credit rating than it does to damage it. Paying bills late consistently does more harm than you know. It may take as many as three on time payments before a credit card or finance company no longer lists you as delinquent on payments. Three on time payments equals three months at the very least. If you are trying to acquire a loan or mortgage, being listed as delinquent on payments is not going to help you. Use your credit card sparingly when finances are tight. Exercise patience and save some of your purchase splurging for another month.
In general, pay your bills on-time, charge only what you can truly afford, acquire new credit cards sparingly, and enjoy the benefits of a good credit rating!
© Doityourself.com 2006
. Questions of a Do It Yourself nature should be submitted to our "