Credit is not substitute for cash
Because of the convenience of using credit cards, for example, it’s hard not to see it as cash or cash substitute. However, this mentality is what brings people into bad credit situation. No matter how long you’ve been using credit, it pays to remind yourself of its purpose every once in a while.
It is important to maintain good credit
Most people do not realize the importance of having good credit until the situation asks for it. The value of good credit goes beyond credit card applications. You also need good credit if you’re looking to buy a home or rent an apartment, buy a car, get a job, or apply for utility services.
Debt can happen to anyone
Having maxed-out credits will hurt your credit score and lenders will see you as a risky borrower. In order to avoid debt, make sure you use your credit sparingly and manage your finances accordingly.
There’s no one-size-fits-all credit card
There are many different types of credit cards, and just as easy it is to get one that fits you, it’s quite easy to get one that doesn’t. Make sure you take the time to learn about the different kinds of credit cards before you apply for one.
Creditors talk about you behind your back
All of your credit information is compiled in your credit report, and evaluated using the so-called credit score. Your creditors and lenders share this information with credit bureaus who report them to other businesses whenever you apply for new credits.
You are entitled to a free copy of your credit report
According to Federal Law, you are eligible for a free copy of your credit report each year from each of the three credit bureaus. You have no obligation to sign up for any of other products or services either.
You can have too many credit cards
Although applying for your first credit card can be a bit of a challenge, once you have one, you’ll find that other credit companies will be more than willing to offer theirs. While it is beneficial to have more than one card in hand, having too many of them can hurt your credit score and even make it harder for you to manage your payments.
You can negotiate for lower interest rates
We all know that high interest rates can make every purchase expensive. While you may not be in place to demand a great deal in the beginning, you may be able to negotiate for better credit card terms in the future once you’ve raised your credit score and have proven to pay your bills on time.
Closing your credit cards can lower your credit score
No matter how frustrated you are with your creditor, you need to think twice before closing out a certain account. You have to take the time and learn the right way of closing a card and which ones you should keep open.