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The Ten Commandments of Good Credit

Here are ten good habits to adopt to build a good credit report—and pay less interest to boot!

  Commandment Comments
I Always pay on time. Late payments lead to interest charges. If necessary, use an approved payment plan.
II Always pay the balance in full. If it’s too high, pay as much as you can, and never less than the minimum payment due.
III Live within your means. Try to keep your monthly debt lower than 10% of your net monthly income.
IV Don’t go over your credit limit. If needed—and if you can handle it—ask for a higher limit.
V Make a budget and stick to it. Spend wisely—once your paycheque comes in—and go over your affairs regularly.
VI Don’t collect credit cards. The more you have, the easier it is to slip up. Also, avoid cards with high interest rates.
VII Don’t transfer your balances needlessly. Only do so when an interest rate is significantly lower, and not just for a short period of time.
VIII Always have an emergency fund for the unexpected. Have at least three times the amount of your fixed monthly expenses, or, ideally, the equivalent of six months’ salary.
IX Tell your creditors when you move. An up-to-date file avoids unnecessary snags.
X Get credit insurance. For peace of mind and to protect you and your loved ones if ever misfortune strikes.


The Four Worst Things For My Credit Report

  • Late payments
  • Missed payments
  • Bankruptcy
  • Bounced cheques

Bankruptcy, for example, can tarnish your report for seven years. That's quite a ball and chain to be dragging around. Before things get out of hand, if you have trouble making a payment, talk to your creditors for help and advice.

If you are in dire financial straits, it’s always better to be proactive than passive.

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