Keep in mind: the purpose of credit is not to incur debt,
just for the sake of incurring debt. Rather, the concept of “credit” is
to help you achieve your financial goals in a responsible,
comfortable manner. Remembering this simple rule will help
you maintain your good credit.
Take — and
keep — control
of
your
credit
Here are some tips on how to manage your credit:
>Create and abide by a budget
>Track your spending
>Remember your credit limits
>Keep an “emergency fund”
>Honor your obligations on time
>Communicate with your creditors
>Summary
Create and abide by a budget.
This does not necessarily mean depriving yourself. It
simply means being aware of your income and your expenses.
It might seem obvious, but it is very important to keep your
recurring expenses from exceeding your regular income.
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Track your spending.
Record all cheques written, all credit card transactions,
and all ATM/Bancomat transactions. Get into the habit of
reconciling your UNFCU and other financial statements every
month. If you notice any possible errors, report them immediately.
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Remember your credit limits.
Always be mindful of the “available credit” on
your lines of credit and credit cards. [Available credit
= (credit limit – outstanding balance).] Do not
exceed these limits. If you find yourself applying for new
credit cards because you have reached the limits on your
current credit cards, this could be an indication that you
are over-extending yourself.
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Keep an “emergency
fund.”
Make sure you have at least three — and preferably,
six — months’ worth of living expense money safely
invested in a liquid, interest-earning savings account. If
an unexpected expense, or an unfortunate event like a job
loss comes up, you will be glad you did. By taking this precaution
now, you will avoid the need to over-extend your credit sources
in the event of an emergency.
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Honor your obligations
on time.
Never miss a payment, even if it is just the minimum.
Try to pay, as often as possible, more than the minimum.
The more you pay, the less finance charges you will incur.
Optimally, try to pay the entire balance each month.
Develop an organized payment system. You can do this manually,
using weekly or monthly file folders marked for payment on
a given date. Or, you can utilize UNFCU BillPay. BillPay
allows members to pay their United States obligations via
the Internet 24 hours a day, 7 days a week. You can even
set up BillPay to make recurring payments where the amount
does not change (rent, mortgage loan, insurance premiums,
for example) automatically. And of course, you can easily
arrange for automatic payments of your UNFCU loans and credit
cards. Sign up
for BillPay now
Always make sure your payment arrives on or before the
day it is due. Remember that when you agree to take on a
debt, you are responsible for making sure your lender receives
your payments on time. Avoid the temptation to take advantage
of “grace periods” — extensions on the
due date before incurring late fees. Many lenders consider
these to be “late payments,” whether they incur
penalties or not.
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Communicate with your
creditors.
This is of particular importance in the event you fall
behind in a payment. Most lenders will be more than happy
to arrange an alternative payment option, particularly if
you are immediately direct and honest with them regarding
your situation.
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Summary
Take control of your credit. Budget, organize timely payment
schedules, pay attention to your credit limits, and keep an “emergency” savings
account. Remember to evaluate how others might be viewing your
financial payment history. To find out how, read Evaluating
Your Credit for more information.
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