Are You Managing Your Credit Well?

There are several dozen sites that give you tips to improve your credit. But how will you know if they work? Other than monthly checks to see how your score is doing, some of the other things you will notice are:

  • You have no late fees
  • Your credit limit is rising
  • You are getting offers for other cards
  • You don’t need your card for bills

among other things. These are all signs that your credit is improving, and you are doing great at managing your credit well.

Managing Your Credit Well

[Read: Debt Management Programs: The Good, the Bad, and the Ugly]

You may also notice other things, like lower bill amounts, and possibly lower interest rates. These are noticeable signs that you are doing well, and your good credit habits are starting to pay off.

Changes in rates

Managing your credit well will often bring an offer to raise your credit limit. You have shown that you are capable of handling the credit offered, and their reward is to increase your limit. This will affect your score in a positive direction, showing that you have more credit available. If you continue your habits, the amount you have available versus the amount you are using will only reflect well on your score.

Another thing that might happen is a lower interest rate. This, especially with a low balance, may not make much day-to-day difference, but will overall lower the amount you have to pay. Small balances will not increase quite as fast, and any new purchases will be at the lower rate that you have earned.

Many companies, especially those with less-limited rewards or very attractive interest rates, screen their customers so the cards are only offered to those who are eligible. Getting these offers in the mail not only shows that you are known to be able in managing your credit well, but you may be able to open a new account, with benefits that you desire.

Before opening a new account, think a bit on it. Be sure that this is a card you will be able to afford (fees, interest, and any minimum usage), and actually will have a use for. There is little use in getting hundreds of miles of travel credit if you do not intend to travel in the near future.

Juggling Bills

When you firs got your credit car, you my have overspent a bit, and had to juggle bills to make all of the payments. This is now a thing of the past, because managing your credit well means that there is enough money to pay the bills, and keep a low balance on the cards as well.

Late fees for any of your bills are now gone- you have done such a super job of managing your credit well, and now do not have either fees, or the penalty interest rate that all cards have if you make major mistakes in your credit activity. This not only saves you money, but shows that you are doing great with your credit!

Card use

One thing you can check yourself on managing your credit well is how you use your card. Needing to use credit for things like bills and food is a sign that you still have a ways to go to become a credit managing superstar. But if you use it simply because it is more convenient than cash, you have a sign that you are doing all the right things.

Rotating credit cards allow you to keep your available credit high; and on-time, more than minimum payments means your balances are at or near zero. This gives you a great credit score, even without needing to look. And gives you more money at the end of the month than paying late fees and high interest rates.

The Score Knows

Your credit score, and what go into figuring it, is an important part of managing your credit well. By using many of the resources on the internet, you can figure out how each type of purchase, payment, or card will affect your overall score. The longer you are able to keep your good credit habits, the better your score will be, especially once you start making larger purchases.

After a few months of seeing all of these factors, you may be willing to only check your credit occasionally. This is potentially a problem, with all of the many possibilities of gaining your information an abusing it that the modern world offers.  Managing your credit well is an ongoing process, and a few months of inattention on your overall credit scores may ruin your hard work.

[Read: Defeat Money Depression and Take Back Your Life]

You’ve made it: managing your credit well, gaining savings, and making plans for the future: this is why we budget, and YOU are a success story for those around you!