Three tips that will help you to administrate your credit

If you are having credit issues, don't panic. Just follow this three steps: check your credit report, only keep one credit card and control your spending impulses. 

Check your credit report

A credit report is a statement that has information about your credit activity and current credit situation such as loan paying history and the status of your credit accounts.

So, when was the last time you checked your credit report? Never make the mistake of just assuming you have good credit because you make your payments on time or you don’t have a bunch of debt. Identify theft is a huge problem and there’s always a possibility that someone used your information to take out a loan, open a credit card or create other debts.

If you have overall control over your finances, your credit report should be included in the accounts. Maybe this report is the one you least like to check, because it can be a headache due to debts or interest rates, but it's absolutely necessary. A very common misconception is that checking your credit hurts your credit score. You can check your credit score as often as you’d like, but it’s usually not necessary. Checking your credit report annually should be your minimum and every six months or so should be good.

Only keep one credit card

While you’re in college (and especially after you graduate) you’ll start to receive a lot of credit card offers in the mail. This is because you’re young enough to be able to pay them back over a period of time, you haven’t had a chance to develop a bad credit history yet, and at this age you’re more impulsive, so you’ll rack up a lot of debt. Remember that bankers don't send them just to make it easier for you, but they expect to take advantage of that as well. That's why they invade you with so many "credit opportunities".

It's important for you to keep in mind that even if it's not a payment that you make at the moment, you still have to pay it at some point, and as time goes by, the higher the amount will be. So if you have credit cards you should establish certain rules for yourself, such as don’t use them in too high amounts, reserve them for emergencies, leave them at home most of the time, among others.

As intriguing as zero percent interest for three months sounds, don’t accept so many credit cards. Get just one and use it responsibly. It’ll save you from the nightmare of having to consolidate multiple credit cards and being overwhelmed with credit card debt.

Wait 10 days before buying anything over a certain limit

The point is to avoid impulse spending. If you still think it’s a good idea after 10 days, then buy it. Sometimes it is inevitable to be tempted to buy things that we find eye-catching, that we feel we need, or perhaps that we have always had the desire to have. And it's completely valid, life doesn't need to be just about working or saving and nothing else. But it's not wrong to take the time to assess whether it's really worth making that purchase? Considering we're talking about a high amount.

If, after 10 days you no longer think it's a good idea, maybe it was just an impulse of the moment and that's it. Imagine if you had done it in the moment, and how many times this could happen to you! So this tip serves you with an expense sieve. If you really have the desire to save, to invest in order to have more income, to reach a certain amount of money saved at a certain time, it is necessary to consider these types of methods as necessary.

You may think it's too strict to restrict you from making any innocent purchases, but stop and think, how much could you be saving by not making not just one, but several of these purchases that go through your mind at least every three months?

See also: "Struggling to get a credit card? Three solutions to your problems!"

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