Thursday, April 23, 2009

How To Manage Your Personal Credit

Do you ever wonder how to manage your personal credit?

Managing your personal credit is very important. You do not want to have too little credit or too much credit. If you have high credit lines, you do not want to use them unless you can actually afford to use them. Do not over extend yourself even if the creditors have given you the credit.

Before you accept a credit card offer you need to know all of the details associated with the card. The number one thing you want to know if there is any kind of yearly or ongoing fee. You do not want a yearly fee in any amount. You also need to know what the interest rate is and more importantly whether it can change and under what circumstances. Some cards raise your interest rate if you are late on a payment.

You only need to have one or two major credit cards. Over time if your credit is good the card companies will raise your limit. If you get too many cards and a high credit line it may give you the false sense that you can actually afford it, when in reality you cannot afford it. Even if credit card companies extend you high credit lines, do not use them unless you absolutely need to and you can actually afford to pay the balances. The credit card companies get a little nervous when you have your balances maxed out. They may take away some of your credit or place other limitations on your account if you keep your card at the maximum limit.

If possible it is good for your credit score for you to keep a balance of approximately 35% of your available credit and pay the regular minimum balance or more each month. Credit card companies love their customers to keep balances that are reasonable. This will help your credit score but at a price because you do have to pay the interest rate on the balance. Credit card companies do not like to see you pay off your credit card each month even though that may be the best way to manage your personal credit.

Always pay all of your credit card payments on time and at least the minimum payment. If you get yourself in a bind, call the credit card company and ask them to help. Do not use a free company that helps you combine all of your credit card payments or a company that helps repair or build your credit. The first one is bad for your credit and the second one is usually a scam.

You can learn how to manage your personal credit on your own.

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