Having a healthy credit score is a good thing. It’s important, too. And it matters even when you’re young.
Just because you have a healthy credit score today doesn’t mean you always will. Your credit rating needs to be maintained. You need to avoid common mistakes that can lower your score.
Here are 5 things you can do to maintain a healthy credit rating/score.
- Educate yourself. Take responsibility for your financial education and read books, articles, or blogs that teach you how to manage your finances effectively. Learn how to budget, how to stay organized financially, and how to make wise financial decisions.
- Read the fine print. Any time you sign a financial agreement, read it and be sure you know and understand what you’re signing. Be aware of what is required and be realistic about your ability to pay back any money you borrow.
- Pay the minimum. On any credit card or loan, be sure to pay your minimum monthly payment by the due date each month. Failure to do so can increase your interest rate and affect your credit rating and future financial transactions.
- Pay more. Even better than paying the minimum payment on your monthly credit card statement, pay MORE than the minimum, or even pay the balance in full each month!
- Don’t rely on credit as an income source. A well-managed credit account can be an important step toward financial responsibility and can be a smart way to establish a healthy credit rating. However, if you routinely max out a credit account or are using it for necessities on a regular basis, chances are you are living beyond your means and setting yourself up for bad credit issues and quite possibly getting in over your head.
Remember: Credit isn’t a bad thing. It just needs to be properly managed, like any useful tool in our lives.