Do’s and Don’ts to grow your credit

If you’ve been told that the most valuable things in life are your word and your credit, over time you’ll realize that it’s not an exaggeration. Therefore, here’s a look at some Do’s and Don’ts that can help you build and boost your credit score. The Do’s

1. Pay your bills on time – Don’t miss the payment due date on your home, loans, or credit cards. Every time this happens, in addition to paying late fees, you risk getting negative marks on your credit report.
2. Have a credit card with low balance – How you handle your credit card debt is an important factor in determining your credit score. The key is to pay the balance in full when the bill arrives. This way, the following month the total amount of credit that was approved for you will be available and you will avoid interest charges. If you adopt this strategy, your credit score will go up in a matter of months.
3. Keep an eye on your credit utilization ratio – Did you know that the way you use credit can impact 30% of your score? Credit utilization ratio refers to the amount of available credit you’re currently using. You need to ensure it doesn’t skyrocket. Experts recommend staying under 30% of your total credit limit. For example, if your total credit limit is $10,000, your outstanding balance should not exceed $3,000.
4. Check your bank statements – You might not open your account statements, but there are several good reasons to review them. Doing so, you can check due dates, balances, and more importantly, identify any suspicious transactions or unauthorized charges. As soon as you notice one, notify your financial institution. On the back of your credit card, you’ll find information on what to do and where to call.
5. Your free credit reports! - Did you know that you’re entitled to a free annual copy of your credit report? The Fair Credit Reporting Act (FCRA) allows you to obtain a copy every 12 months. You can apply through one of the three major credit bureaus or visit AnnualCreditReport.com. Check it thoroughly to detect any incorrect information.

Watch out for the Don’ts

1. Keep the oldies, but goodies - We’re talking about long-standing credit cards or loans that you’ve paid off in time. Try not to close those accounts so that you benefit from a longer average credit history and don’t hurt your score. Keep in mind that your track record is another factor to create and strengthen your credit score.
2. Say no to unnecessary inquiries – If you say “yes” every time a store offers their credit card, that will show up on your credit report and could affect your credit score. Each inquiry can bring down your score a couple of points.

Treat your credit with respect. Having a solid credit is the best way to increase your ability to move freely in life and achieve your long-awaited financial freedom.