Build Your Credit Responsibly
Building a good credit history can help you through many sound investments, such as buying a home, financing your education and landing a job; therefore, starting with your first credit card, start nurturing your credit line, responsibly and smartly, otherwise, you end up in a pile of debt and bad credit.
Limit your borrowing to what you can afford
There are two effects of controlling your spending habits, such that you only charge or borrow what you can afford, and these are: you avoid excessive debt and you leave good credit impact to creditors when you easily pay back what you borrowed or placed on charge. This responsible form of spending operates, too, when you apply for a loan, such that only take out as much loan on what you can afford to repay, despite what the lender will inform you on how much you are qualified to loan, and seeing to it that you have carefully reviewed your budget for your monthly loan payment, making sure that the payment doesn’t’ exceed the amount your computed.
Make use of only a small amount of your credit limit
A responsible and smart way to build your credit standing is using a small amount of the obtainable credit limit, either stay below 50 % or 30% of your credit limit, because lenders know that borrowers who maximize their credit limit are those who have difficulty in repaying what they borrowed; therefore, never maximize your credit limit if you will just have a hard time paying it full within the month. As much as possible, especially for first-time credit card users, limit yourself to just one credit card because the more credit you have, the more you will end up using as many charged expediture and it will be hard to keep up with your monthly balance and payments and this will eventually result into a negative credit standing with your creditors.
To build a good credit score, always be on time to pay your monthly credit bill payments, because any delinquent payment may wind up on your credit report and the account will be sent to a collection agency, which results into a negative account off your credit report and more delinquent payments can be like a debt collection that will be hard to overcome. A large component of a credit score includes appropriateness of your payments that is paying your balances on time, which improves your credit, therefore, charge only what you can afford to pay so you won’t have a problem paying your balance every month and doing this is letting the creditors know that you are capable of paying your bills.
Treat your credit card balance the right way
The smart way to pay your credit balance is through these: make it a point to pay more than the required minimum amount in your credit card each month so you are able to pay the balance as fast as possible, avoid making late credit card payments, and continue to keep the balance at a reasonable amount.