To recognize National Credit Education Month, Metes & Bounds Title, a Division of Land Castle Title Group, LLC is here to help you understand the ins and outs of how to achieve a good credit score. Monitoring your credit score and keeping yourself educated on this topic can be beneficial to helping you manage your credit in the future. Continue reading below to learn more about ways to build good credit.
What Is Credit?
As a simple definition, credit is the ability to borrow money or obtain goods with the understanding that you will need to pay for them later. Creditors grant different forms of credit based on their trust in you to pay back the amount you borrowed, alongside any finance charges and interest that apply. When the first credit card was introduced in 1950 by the Franklin National Bank, worthiness for credit was judged by reputation alone. Unfortunately, this method was too subjective and led to error, manipulation, and bias.
Today, U.S. creditors give a more objective approach and look to an individual’s credit history to determine whether they can issue you credit. Your credit history is a record of your borrowing and repaying funds, summarized into files known as credit reports, which are then in turn compiled by independent credit bureaus such as – Experian, TransUnion, and Equifax. Your credit score is an easy to interpret number that summarizes your credit report information to help minimize the possibility of bias and narrow lending decisions.
How to Build Good Credit
When it comes to significant purchases, such as buying a car or house, good credit is necessary when seeking a loan. A higher credit score can earn you better interest rates and terms on credit cards or loans. Various card issuers also give greater rewards to customers with substantial credit.
However, financial lenders are not the only ones who look to a credit report or score. Property owners, insurance companies, utility companies, and prospective employers all concern themselves with an individual’s credit history. Credit can impact your life significantly, so it is essential to keep up a good score. Here are a few ways you can keep it steady in the green:
- Pay off loans on time, every time. Set up an electronic reminder or automatic payments. Don’t miss the due date!
- Do not get too close to your credit limit. Keep your balances low compared to your total credit limit.
- Long credit history can benefit you. The more experience your credit report shows with paying dues on time, the more information to see if you’re an ideal credit recipient.
- Only apply for the credit that you need. Using a lot of credit over a brief time may seem like your economic circumstance has changed negatively.
- Do not be afraid to dispute errors. Keep an eye on old credit card accounts that are not in use! Identity theft is damaging.
Here To Help
Metes & Bounds Title, a Division of Land Castle Title Group, LLC is here to help keep you informed about how to make your next closing seamless. We are ready to serve you with transparent communication and accurate title insurance. If you’re looking for a title agency that prioritizes your success, contact us today!