Posted On: January 20, 2023 by F & M Community Bank in: Community Matters
New Year, New You?
If one of your goals for 2023 involves working on your credit, check out some helpful tips.
Good credit is a blueprint for financial success, so it is essential to create a track record that demonstrates sound money management principles as you plan your financial future.
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Make your payments on time, every time.
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Stay in your financial lane – manage your debt-to-income ratio. This is the amount of monthly debt obligations in relation to your monthly gross income.
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Apply only for the credit you need. In the checkout line, department store cards are very enticing, but consider your “need” for one before signing up.
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Use credit cards wisely. Be careful not to overspend. Do not let your balance get close to your credit limit. This is called credit utilization – the balance on your account compared to the credit limit on the account. It is commonly recommended to keep your credit utilization rate below 30%. For example, if your total credit limit is $10,000, try not to have your balance on that account exceed $3,000.
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Develop a good mix of credit (such as a revolving credit line and an installment or mortgage loan) to boost your credit score and demonstrate that you can manage different types of credit.
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Monitor your credit regularly so you can correct any errors and detect potential signs of identity theft. Order a copy of your credit report annually from www.annualcreditreport.com.
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Check out The Consumer Financial Protection Bureau’s (CFPB) website for lots of other helpful information. Credit reports and scores | Consumer Financial Protection Bureau (consumerfinance.gov)
By establishing good spending and savings habits early you’ll be able to make your money work for you and speed up your recovery from temporary financial roadblocks. Your local F & M Community Bank banker can offer
