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Creating Good Credit
Its good to think of consumer credit as a privilegeone that will
be granted judiciously in your early adult years and then will expand over
time as you demonstrate that you can handle it responsibly.
angelic advice - use it wisely
on time and on budget - punctuality is a
the minimum maxim - words to live by
keep in touch
The beauty of budgeting
Take time to establish a monthly budget for yourself, one that in- cludes
realistic figures for card payments. Monitor your bills and compare them
to your budget every month, making spending adjustments when necessary.
To avoid overextending yourself, keep your monthly debt obligation below
10 percent of your monthly net income (after taxes). For example, if your
net income is $800 a month, your monthly loan payments shouldnt be
over $80. That includes your credit card payment, because your card is a
loan, after all.
Preparing for planned and unexpected expenses is the best way to guarantee
that your credit history remains strong and unblemished over time.
Be ontine, every time
When a bill or Visa® card statement arrives at your home, the most important
item to notice is the payment due date.
Whether you choose to make the minimum payment or pay the total outstanding
balance, your payment must reach the financial institution or business by
the payment due date. Otherwise, it is considered a late payment and will
probably appear as such on your credit history. Late payments can also be
more expensive, incurring penalties, extra fees, or additional finance
If an account due date consistently falls at an inconvenient time of the
month (a week before payday, perhaps) contact the organization to see if
they can change your billing cycle. Or adjust your budget accordingly.
Learn the minimum maxim
The minimum payment shown on your Visa statement is just thatthe minimum
that the lending institution will accept for that specific month.
Always be prepared to make at least the minimum payment.
If you wish to reduce your finance charges, or plan to make a number of
additional purchases in the coming month, consider paying a larger amount.
Limit your limit
The credit limit shown on your statement is the maximum amount that the
institution that issued your card is prepared to lend you, based on your
income and credit history.
Avoid spending to your limit. Its a good idea to set aside a portion
of your available credit so you have it for emergencies like car repairs
or unplanned medical costs. Although many lenders will consider increasing
your limit upon request, a roadside garage is not the most comfortable place
to make this call.
Spending over your limit is usually considered a violation of your account
agreement and may incur additional fees or penalties, or the freezing or
cancellation of your account.
Keep in touch
If you change your name, address, or job, notify your lending institution
immediately. Your payment could turn into a late payment in the time it takes
for a statement to be forwarded to your new address by the postal service.
Send your updated information before the fact, not after.
Also, contact your lender if you cannot make a payment on your account for
any reason. Special payment options or agreements may be arranged that will
satisfy both you and your lender, while keeping your good credit history
Use your credit
How you handle your bank accounts and other responsibilities may affect your
credit- worthiness, so the best way to establish a credit history is to actually
exercise the credit already given to you.
Use your credit responsibly. And be especially sensitive to the payment
agreements you made when you established your accounts.
Since December 1999 - last modified: February 22, 2012