Having access to credit is important as you build your future.
Having access to credit is important as you build your future. Establishing and maintaining good
credit is essential to having opportunities to borrow money for countless life needs. But good
credit doesn’t happen by accident. First Citizens Bank has established a series of “Credit Tips” for our customers and our community so that you may recognize various ways to establish and control your credit rating:
- Establish and understand your household budget so that you know exactly how your money is being spent and what expenses you can reduce.
- A sound financial future begins with having a savings account in which to deposit excess funds and to allow you a financial “cushion” so that you need not borrow every time a unique expense arises.
- Balance your checkbook each month to keep a close track on available funds and to avoid overdrafts or returned checks, which damage your credit rating.
- Consider transferring your balances from higher-rate credit cards to a new, lower-rate credit card.
- Be sure to pay your bills on time, every time. This includes not only credit cards and loans, but utility payments as well as mortgage or rent payments.
- Keep your credit active and show a consistent pattern of paying your credit extensions on time. Also, keep your balances low as it affects your credit rating when balances are at or near credit limits established. Your balances should not exceed 50% of your credit limit.
- Diversify your credit to include not only revolving credit cards but perhaps installment loans, lines of credit and mortgage loans. Maintain more than three credit accounts.
- If interest rates are similar between existing and potentially new credit cards, remain with your existing card. A long credit history is preferred over a short credit history.
- If you have old “collection” debts, save money to pay them in full. It is possible that you can negotiate with a creditor to remove derogatory credit ratings if the account is paid in full.
- Review your credit rating on a regular basis. Each of the three major credit bureaus (TransUnion, Experian and Equifax) can provide your current credit report to you. Be sure to examine for incorrect information and be aware of identity theft/false credit accounts.
- If you are trying to establish credit, inquire about a Secured Credit Card; a credit card backed by your savings account which allows you to establish a payment history.
*Beware of co-signing or guaranteeing another person’s debt. When you do so,you acquire a contingent liability which affects your personal credit history and rating.