A Basic Guide to Credit

A credit guide can be summed up in three steps: (1) establish it; (2) maintain it; and (3) use it responsibly. There is nothing easier. This is the shortest way to credit success and also happens to be one of the best plans you can follow.

(1) Establish It

A person that tells you to never get a credit card is giving you bad advice. It is that simple. Despite what some people may think about credit card companies or credit in general, the fact is that we live in a time when a credit score is a powerful financial asset. Becoming monetarily successful is difficult enough without cutting off a significant financial asset. Establish credit by getting a low interest rate credit card.

(2) Maintain It

Many people have no idea what is in their credit report. Always do monthly checks of your credit reports in order to prevent identity theft. Additionally, you should check your credit reports monthly in order to make sure that no inaccurate information exists. Inaccurate information will affect your credit score.

(3) Use It Responsibly

This is the most important step. Credit is a privilege, not a right. Do not misuse your credit and you will have nothing to worry about. Do not charge something unless you have the money to pay it off; a credit card is not an alternative to lack of cash! Pay more the minimum balance in order to minimize interest payments. If you use your credit responsibly, you can always negotiate with your credit card company for a lower interest rate and a higher credit limit.

Following these three easy steps is the most basic and most successful guide to credit. In sports, the best teams are the ones that do the simple things well; the same is true in credit.