Contrary to popular belief, money isn’t what makes the world go round. Credit does. Almost every financial decision you make throughout your life counts to something – none more so than your choices when it comes to credit.
Your credit report is essentially your financial history displayed in one go and everything you do tells various parties how you deal with money and debt.Here are 5 ways you can keep your credit report healthy.
Know Your Status
First way to ensure your credit report stays in the green is to actually know where you stand. Thanks to modern technology finding out your credit score is easier that you would think. Most loan companies will give you a thorough break down of your credit report if you sign up with them.
This doesn’t mean you have to take out a loan with them but rather it’s a trade – your contact details for something that could very well impact your financial future. Check out Loan Finder SA or My Bond Fitness to find out your credit status along with your affordability.
Generate Good Debt
Once you know your status you can start to do something about getting it on the upward trend. As counter intuitive as it might sound, actually getting into debt helps build your credit score. The banks and other financial institutions want to see that you can not only handle money but pay it back on time and in full.
A credit card can be a dangerous thing but you do get some that make overspending a little more difficult. Contact your bank about getting a limited credit card in order to start building a healthy credit score.
Boring Old Budget
Sadly, the best way to ensuring your credit report stays rosy is still good budgeting. None of us enjoy the idea of budgeting, and it’s often as successful as a New Year’s Resolution, but it can be the difference between staying on track and finding yourself in a serious hole.
A simple exercise of breaking down your monthly expenses versus your income can help you get an idea of where you might be at the end of each month, if you don’t encounter any nasty surprises. Keeping track of your cash will have a positive effect on your credit report by simply ensuring you have enough money each month to pay off your debt.
Once you start incurring debt – and you generally will – always ensure you pay it back on time and in full. Not only does this show the bank that you are responsible with money but it also keeps you from incurring any extra interest on outstanding amounts.
Another thing to remember is never “max out” your credit cards. The aim is to keep yourself from getting stuck in an endless debt trap – one where you are forced to continuously rely on credit each month.
Be Aware But Relax
Your credit report is undoubtable one of the most important references in your life but it’s also not worth obsessing about. The times it will matter most are when you are looking for some sort of loan – be a personal loan, home loan or just a quick payday bump. The rest of the time be aware of how your financial decisions can affect your score but don’t let it rule your life.
Making smart choices, such as avoiding store credit or high interest loans, and ensuring your bills are paid on time will not only keep your credit score healthy but also keep you stress free.
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