TAMU > Finance > SBS > Debt Management> Training> Maintain Good Credit
Maintain Good Credit
Ways to establish good credit:
- Pay off your credit card balances in full each month.
- If you can't pay your balance in full, make at least the minimum payment. This will cause over the limit fees to be charged to your account making it even more money you need to repay.
- Pay your bills on time.
- Undercharge. Don't charge as much as your limit allows.
Ways to lose good credit:
- Making late payments.
- Exceeding the credit limit on your credit card.
- Writing bad checks.
- Defaulting on a loan.
- Filling for bankruptcy.
Access your credit report:
Consequences of bad credit:
- You may not be able to rent an apartment.
- You won't be able to buy a house.
- You may not be able to purchase or lease a car.
- You may not be able to obtain other forms of credit.
- If you are able to get credit, you will pay very high interest rates.
- You can be turned down for a job.
- It's like getting a bad grade - it stays on your permanent record.
Credit card Do's and Don'ts:
Do's:
- Replace revolving credit cards with a card that requires you to pay off the entire balance each month.
- Replace a credit card with a banking debit card.
- Before charging anything, re-examine your wants-versus-needs list.
- Look for a card with the lowest interest rate. Find out how interest is calculated on your account.
- Investigate any "hidden fees" associated with your credit cards.
- Always pay more than the minimum required, and pay it on time.
- Pay attention to the fine print, including potential late-payment fees and interest-rate changes.
- Find out when the interest starts adding up.
Dont's:
- Don't get a second or third card. One card is enough.
- Don't use them for cash advances.
- Don't charge more than you can pay off in a month.
- Don't use your credit card to pay for groceries or your rent. (If you don't have sufficient disposable income to pay for these essential needs, then you need to reconsider your budget.)
- Don't be persuaded by rebates, cash rewards and free airline miles.
- Don't permit an increase in your credit limit.