Making Borrowing Decisions
Key Takeaways
Tips for Building Good Credit
Get your free credit report each year.
- You can get a free credit report from each of the three major credit
bureaus once per year at AnnualCreditReport.com. This is a valuable
tool for checking your credit report for errors and to see how your
credit score is calculated.
- You can get a free credit report from each of the three major credit
bureaus once per year at AnnualCreditReport.com. This is a valuable
tool for checking your credit report for errors and to see how your
credit score is calculated.
Use credit cards responsibly.
- Credit cards can help establish your credit score, which will be
important later on. However, using credit cards responsibly and paying
your bills on time is important.
- Credit cards can help establish your credit score, which will be
important later on. However, using credit cards responsibly and paying
your bills on time is important.
Avoid the credit card minimum payment trap.
- The minimum payment on your credit card bill is the smallest amount
you can pay without incurring late fees or other penalties. However,
even if you pay the minimum, you will still be charged interest on your
outstanding balance. The best way to avoid paying interest on your
credit card purchases is to pay your bill in full each month.
- The minimum payment on your credit card bill is the smallest amount
you can pay without incurring late fees or other penalties. However,
even if you pay the minimum, you will still be charged interest on your
outstanding balance. The best way to avoid paying interest on your
credit card purchases is to pay your bill in full each month.
Payment history is the most important factor to your credit score.
- Your payment history makes up a large part of your credit score.
This means that it is essential to pay your bills on time, every time.
- Your payment history makes up a large part of your credit score.
This means that it is essential to pay your bills on time, every time.
Borrow when it makes you better off.
- There are times when borrowing money can make sense, such as when
you are buying a house or a car. However, it is important only to borrow
money when you can afford the payments and when the borrowing will
actually improve your financial situation.
- There are times when borrowing money can make sense, such as when
you are buying a house or a car. However, it is important only to borrow
money when you can afford the payments and when the borrowing will
actually improve your financial situation.
Keep your debt-to-income ratio below 36 percent.
- Your debt-to-income ratio is the percentage of your monthly income that goes towards debt payments. A high debt-to-income ratio can make qualifying for loans difficult and damage your credit score.
Following these tips can improve your credit score and build a solid financial foundation.