How to Build and Maintain Your Credit

                                                    
In today’s society, credit is our gateway to purchasing big tickets items like a home, cars, electronics and many other daily needs. When you buy something on credit you are responsible to repay it under the contract with the lender. If you do not pay the debt according to the terms and agreement your credit score will be affected. When you have bad credit you will be denied financing up to 90% of the time because the lender looks at you as a serious risk, which is not good.

So how do you build and maintain a good credit?
Establish chequing and savings bank accountsThis is the basic step necessary to build credit. Lenders see bank accounts as signs of stability. Opening a chequing and savings accounts is one of the few things young people can do to start building a financial history. While you can't get a credit card in your own name until you're 18, many banks have no problem letting you open an account.

Always pay your bills on time This is one of the major factors that keeps people from increasing their credit score. When you make a late payment, the lender will mark your credit and this will substantially affect your credit score. Some people do not listen to this and charge more than they can afford. They get caught in a trap that they can never get themselves out of because they can barely afford to pay the payments.

Check your credit report regularly Your credit report is available to you at little or no charge from major credit reporting agencies like TransUnion or Equifax.

Your credit report contains all your financial obligations and accounts associated with you. This is what banks, mortgage, credit card and auto loan companies use when reviewing your application. Every transaction or purchase that you have made shows on your credit report.

Check your credit report for inconsistencies, incorrect information or accounts that you do not know about. If there are any corrections that need to be made, follow up with the credit bureaus.

Do not spend more than your credit limit  A limit is set for you so you do not go over it. A creditor looks at you and thinks that you spend beyond your means and instead of you trying to improve your score you are hurting it.

The best way to avoid going into serious debt or financial trouble is to avoid using credit at all, use cash or your bank account instead. If you are in a situation where it is an emergency use credit and then pay it off immediately. The problem with today’s society is that we spend way more than we make and this is what gets us all in trouble.