Rebuilding Your Credit Score

Credit Debt Management - Responsible Use of Credit

Like Aladdin rubbing his magic lamp, swiping a credit card may allow you to possess on impulse anything that costs within your credit limit. However, when the due date for payment arrives, no Genie pops up to make your financial burden disappear. After all, credit is not as effortless as magic. There are corresponding financial responsibilities when you use it and repercussions when you fail to take responsibility. Hence, if your pocketbook holds at least one credit card, it is vital that you know proper credit debt management.

Credit Debt Management And Your Credit Score

Due to lack of credit debt management, you may already have learned the importance of responsibly using credit the hard way. Or perhaps, you may just be new to getting access to credit and realize early on that proper credit debt management is key to having a good credit score. Whatever position you may be in, always remember that however you use credit someone else is “watching” you. Your credit transactions are always recorded. How good you are at paying off debts are reflected on your credit record. If you fall behind payments, it is reported to the credit bureau. This will have a significant impact on your credit rating and ability to apply for additional credit or get a mortgage loan. Thus, it is important to form good credit habits that reflect back positive feedback to the powers that be.

Credit Debt Management - Rebuild Credit Score Through Responsible Credit Card Use

Build or rebuild your credit rating by starting slowly. Use your credit card to make small charges, but make sure to pay the total monthly balance in full come due date. You do this not because you do not have the cash to pay for the item, but because you want to start establishing a good credit history and train yourself to follow good credit habits. One way to do this is to pay for a recurring bill, such as a monthly subscription, using your credit card and religiously pay it monthly. For at least six months, make this the only transaction in your credit card. The goal for doing this is to form the habits of maintaining a credit card balance below your credit limit and paying your total balance in full each month. These two  practices will do well to build or resuscitate your credit rating.

When the two habits are in place, you can now start using your credit card to pay for small ticket items as long as your credit card balance does not exceed 30 percent of your credit limit. When you swipe your card to buy something, always make it a point to set aside the money to pay for it so that when due date comes, you have the wherewithal to pay in full. Make sure that you do not use it to spend for something else.

Your credit score is a reflection of your credit and spending habits; it takes good credit debt management to form good habits to establish a good credit score.