In honor of Credit Education Month, we compiled a list of Easy Tips to help you better understand your credit and how to build it.
Here are some examples of how to better manage your credit:
1. Why You Need to Build Credit
Your credit impacts many different parts of your life, from mortgage approval and car loan eligibility, to getting better interest rates that can save you money. Avoiding opening credit cards might seem like the best way to keep yourself from spending, but building good credit is vital to saving you money down the road.
2. Paying off Credit Card Debt
Credit card debt got you stressed? Concentrate on paying off the card with the smallest debt or the card with the highest interest rate. Tackling your debt can be daunting, so getting the smallest debt out of the way can help you focus more on chipping away at larger debts.
3. Start Building Credit
Are you having trouble building your credit? Maybe a secured credit card is right for you. A secured card is backed by a cash deposit you make upfront; the deposit amount is usually the same as your credit limit. This card is meant for building credit and you will receive your deposit back when you close the account. Check out Republic Banks to make building your credit even easier!
4. How You Use Your Credit Card Matters
Did you know only using your credit card for big purchases can actually hurt your credit? If you're using more than 30% of your available credit, your score could be taking a hit. Putting your regular expenses on your credit card is a great way to earn rewards without damaging your credit or costing you extra in interest.
5. What's a "Good" Credit Score
Credit scores can range from 300-850. Above 700 is usually considered a "good" score, but each lender can determine their own definition of a good score. When you go to borrow money, a good credit score does not guarantee a good interest rate — or even approval. Sometimes lenders will look at other factors more than just your credit score.
Understanding your credit score, what it means and what it does, can be difficult. We hope these Republic Bank Easy Tips help to get you started on the right path to building your credit score and creating good credit habits!