Credit Do's and Don'ts

posted October 4, 2018 in Blog

dos and don'ts
  • Credit Do – Apply for a Greater Iowa credit card. According to myfico.com, having new credit accounts for about 10 percent of your credit score. GICU offers a simple credit card program that features a 25 day grace period and no annual fee.
  • Credit Don’t – Apply for multiple cards at once. Applying for a credit card means authorizing a credit check that creates a hard inquiry on your credit report. These hard inquiries count towards your score for 6 months. Allowing a number of these within 6 months will hurt your credit score.

  • Credit Do – Make regular, small purchases only. Credit card activity is an influential piece of your credit score. Using it regularly for small purchases, like groceries and gas, and paying the balance at the end of each month will help your score.
  • Credit Don’t – Cosign for your friends. Your credit score will drop if your friend misses even one payment. No matter how great of a friend they may be, putting yourself in this situation can ruin your credit and your friendship.

  • Credit Do – Pay off your statement balance every month. It’s a myth that carrying a balance from month to month helps your credit score. The lower your credit utilization, the better. Pay off balances quickly and try to keep them at zero.
  • Credit Don’t – Don’t spend more than you can afford or too much of your available balance. Credit should not be treated as a way to make ends meet when you don’t have the money. If you are already struggling, spending more than you can afford on a credit card will make it harder in the end.

  • Credit Do – Make your payments on time. This is the most important thing you can do if you use a credit card. Set payment reminders so that you aren’t missing your due dates.
  • Credit Don’t – Go over your credit limit. You should never use more than 30% of the credit that’s available to you. This can be very damaging to your credit score and will make it harder to manage your debt.

  • Credit Do – Learn about your card benefits such as rewards, credit scores and extended warranties on purchases. Rewards programs are great and can be used to your advantage if you understand and use them correctly.
  • Credit Don’t – Share your credit card number if you have not initiated the transaction. Identity thieves can call and claim to be an organization that you may trust and ask for your credit card number. Never share your number if you did not initiate the phone call or email. Make sure calls are coming from a published and verified number and messages from a secure messaging system. ‘

Greater Iowa Credit Union offers a great simple credit card program, you can apply today! We are happy to help you be responsible with your credit card to keep your credit score high!