Tips For Managing Your Credit For New Borrowers
There’s a lot to learn when you enter the world of credit. And it is important for you to take the right steps to keep your credit in check while your credit score remains stable or grows. But while learning all about managing your credit is important, it can be confusing if you don’t have the right tips to help you. Use this guide so you can learn how to manage your credit as a beginner.
Use These 6 Tips To Manage Your Credit If You Are New To Borrowing
1. Know The Different Types Of Credit
There are tons of credit options to choose from when you need to borrow money. These are split into revolving credit, installment credit, and open credit options. It’s important to know the kind of credit you have while managing your credit, so you can keep up with your credit’s terms. Once you know how your borrowed money is split, you’ll understand what kind you need to borrow.
Revolving credit is when the money you borrow rolls over to the next month until you pay it in full. Installment credit is when you borrow a definite amount and have set monthly payments to repay it. Open credit must be paid off every month, such as your utility bills. You can use the services/goods rendered before having to pay for them when the bill arrives. Depending on why you need the money, you’ll choose from different individual forms of credit, such as:
- Educational loans for financing college costs.
- Credit cards for general day-to-day purchases.
- Mortgages fund homes and are usually paid over 5-, 10-, 15-, or 30-year terms.
- Auto loans pay for a new or used vehicle over time.
- Short-term loans, such as payday loans, for financial emergencies.
2. Always Read The Fine Print
The next thing you need to do when managing your credit is to read every piece of paper. Signing up for a new line of credit could be done in just a few hours, but it’s important to either read the agreement yourself or speak to a company representative who can answer your questions before anything is set in stone. When managing your credit – especially a new credit line – you’ll want to know the specifics, including the following:
- How much credit will you have?.
- How long will it take to get your credit?
- What is the term of the loan?
- Is the loan revolving, installment, or open credit?
- What is the repayment process like?
- What is the interest rate?
- What are the possible fees? (late fees, annual fees, refinancing fees, prepayment penalties, etc.)
3. Understand Annual Percentage Rate
The annual percentage rate – or APR – is another term you need to get familiar with when managing your credit. APR is a percentage you are charged annually for borrowing money. Essentially, this is the interest you will be paying on your credit. You’ll want to know what your APR is and keep it in mind as you use your credit line or loan. Lenders have to disclose your APR before you finalize anything.
4. Keep Your Credit Limit Balanced
If you have borrowed money on a credit card and still owe the balance, it would not be wise to open up another credit card account; however, if you owed money on your mortgage, as many of us do, but got a credit card, this would be acceptable. It’s all about balancing your credit types and limits when managing your credit for beginners.
If you have debt from non-essential spending, such as shopping, you’ll want to pay that down before taking on more credit. If your debt is essential, such as a mortgage or a small loan for a primary vehicle, getting an additional line of credit may lower your debt-to-income ratio; just be sure to pay off discretionary spending and never miss a monthly loan payment.
5. Always Pay On Time
When you take on new credit, you legally agree to pay back the borrowed money by a certain time – and if you don’t, you’ll have to incur the penalties. If you’re forgetful when it comes to managing your credit and bills on time, set up alarms on your phone or computer. You can even set up automatic payments altogether to never miss a monthly due date.
6. Consider Payday Loan Credit For Emergencies
Managing your credit could get tough if you are facing urgent bills or financial emergencies. This happens often in the form of unexpected medical bills, overdue rent or utility payments, emergency travel, or home/car repairs. Luckily, payday loans are available to cover these costs when you need it most. Fast Payday Loans, Inc. can give you anywhere from $100 to $1,000 to cover emergency costs.
Plus, we have in-store and over-the-phone application processes that can take as little as half an hour. For either option, start by filling out our online form. One of our representatives will then give you a call to discuss your in-store or online payday loan options. You can then choose to either complete the application process over the phone completely or head to one of our nearest payday loan location to finish. If approved, you could have your money on the same day or the next.
Manage Your Money Better Today!
Managing your credit doesn’t have to be as difficult as you thought. As long as you have these tips in mind, you will be on the right path. You also shouldn’t let financial emergencies leave your finances in the gutter. If you’re managing your credit well, consider an in-store or online payday loan to cover urgent costs until your next paycheck. Get in touch with us today through the online form!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.