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  • Gilesa Thomas

Knowing the Basics of Credit

Updated: Jul 16, 2019

An extra's guide to understanding credit




I feel like a lot of us are afraid of credit when in reality it is actually incredibly helpful. In fact it determines are credit rate, apartment deposit, ability to get a mortgage and so much more. Here is a quick crash course on knowing the basics of surviving credit.


Be Familiar Your Credit Score

You’ll be posting loads of engaging content, so be sure to keep your blog organized with Categories that also allow visitors to explore more of what interests them. There are many free secure websites and apps that let you check your score. I am subscribed to both Mint & Credit Karma, however I am pretty sure your financial institution has it as well. Even my credit union provides me with my credit score each month.


Learn What Determines Your Credit Score


These are the factors that determine your credit score

Pay Your Bills On Time

Check out this post I wrote. Trust me, I have your back for paying bills.


Utilize Under 30%

A good way to remember this is 30% of your credit score is based on your balance, so try to stay under 30%. Here is a template I made to help figure out what amount you should stay under.


Mature Your Credit

The age of your credit history matters. You can pay your bills on time but only have had credit for a 6 months and you still will not receive the same benefits as someone who has paid their bills on time for the last 6 years. The longer the history of your credit, the more evidence you have towards how responsible you are.


Don't Just Have Credit Cards

Diversifying your credit helps creditors in know what you can handle. Credit cards, personal loans student loans, mortgage and more all say different things about your ability to pay off your debt.


Don't Open Too Many Accounts At Once

Okay so I know I just said it is important to have different types of credit but remember the average age of your credit accounts for 15% percent of your score and opening too many new accounts at once raises a lot of red flags. I like to think of the two factors as one and just tell myself 25% of my credit score is dependent on how often I am opening an account.


Pull Your Credit Report

Your credit report is exactly what it sounds like. It is a detailed report of your credit information fro m your creditors. Now important to know is that these do not include our credit scores. You might be surprised to know what shows up on your credit report. Make sure you are paying your bills as they are coming in. This includes medical bills, phone bills, internet bills all of that. Once it goes into collection, it will show up on your credit report and hurt your history


We are allowed to pull our credit report from the each of the 3 credit bureaus once a year. I strategically pull my credit report every 3 months on annualcreditreport.com. On December 1st I pull Experian, on April 1st I pull Equifax, and on August 1st I pull from TransUnion. It gives me a better peace of mind, however I know many people that pull all 3 at the same time once a year. Whichever you choose, I suggest taking advantage of that free yearly check.


Overall one of the best things you can do for your credit is be aware of its status. As cliche as it sounds, control your credit. Do not let your credit control you.