There are a few good rules of thumb to maintaining a good credit rating. If you are able to follow them, then you will have no trouble getting credit or keeping your balances down.
- Pay your bills on time. Even one late payment can negatively affect your credit rating.
- Always pay the minimum amount due. Otherwise, not only will you lower your rating, but also you will incur added fees.
- Occasionally, if not consistently, pay more than the minimum amount due. This helps to keep your balances down, so that you can continue to come up with the minimum payment due.
- Avoid opening several credit cards at the same time. Many stores offer incentives such as percentages off the total purchase if you open a new credit card with them. This has a negative impact on your credit rating.
A few simple reminders:
- Bills include not only your credit card bills, but also your mortgage and or home equity loans. Your payment history is a major factor in computing your credit rating.
- It takes longer to renew your credit rating than it does to destroy it. Paying bills late consistently does more harm than you know. It may take up to three on-time payments before a company no longer lists you as delinquent on payments.
- A little bit of credit card use over a long period of time is better than a spate of large credit card use in a short period of time.
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!