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