While the vast majority of Americans have at least one credit card in their name, and in their wallet, there’s still a lot to be learned about those little pieces of plastic. Unfortunately, many consumers do not have all of the information about what makes credit so valuable, and potentially so dangerous. If you are one of the millions of Americans seeking debt advice, it’s important to arm yourself with information. Here are five things to know about credit.
5 Things to Know About Credit
Information is power. Here’s what you need to know to better help you get rid of credit card debt:
- A good credit score secures financial wellness. Credit is more than just a plastic card you use to buy things—it is your financial trustworthiness. Good credit means that your history of payments, employment and salary make you a good candidate for a loan, and creditors—those who lend money or services—will be more willing to work with you.
- Bad credit scores are fixable. A bad credit history can haunt you for a long time—seven years or more. Make sure you correct any errors on your report. Asking for help from your creditors can go a long way in terms of fixing bad credit. If you have a poor credit score, take the necessary steps to start fixing it. Pay down debt wherever possible and make payments on time.
- Make the right choice. Consider fees, limits, interest rates, and benefits – which can vary substantially among credit card issuers – when opening a new card. Some credit cards that look like a great deal at first glance may lose their appeal once you read the terms and conditions of use and calculate how the fees could affect your available credit.
- Discipline goes a long way. Try to pay your bills on time and in full as much as possible. This will help you avoid late fees, and build a positive credit history.
- All credit scores are not the same. There are three major credit reporting agencies (Experian, Equifax, TransUnion), and they each have their own model for calculating your score. They also may not all be using the same information. Each score matters, and different lenders may be using different scores to evaluate you.
When used wisely, credit is a great financial tool. If you have accumulated credit card debt and are looking for financial assistance, sign up for a free credit counseling session today.