Establish a lifetime of good credit: Tips for maintaining your credit

Your credit score is your financial transcript. It is compiled from your credit report, which is a detailed accounting of your borrowing history. And it can have a huge impact on your financial future.

·Lenders use it to judge your credit worthiness and decide what interest rates to charge you.

·Landlords check it when reviewing your application to rent a property.

·Employers refer to it when assessing your financial habits and character.

This is why it is so important to build a strong credit history by making sound financial decisions and using credit wisely. The best way to maintain good credit is by demonstrating you are a financially responsible borrower. Here are some things you can do to help manage your credit cards and debt effectively while keeping your credit in good standing:

1. Seek credit cards with low interest rates. One advantage of having a good credit score is being eligible for the lowest interest rates available. However, it’s not always easy to find a card with great rates. So look for the card with the lowest rates and best rewards for your lifestyle.

2. Pay bills on time. Always pay your credit card bills on time. Late payments will have a negative effect on your credit score. If you forget to pay bills on time, consider setting up automatic withdrawal from your checking account. If you have overdue bills, plan to take care of them immediately.

3. Make more than the minimum payment. If you only make the minimum payment to your credit card balance, costly interest payments will be added each month. If you can’t pay your credit card balance monthly, pay more than your minimum monthly payment and stop using the card.

4. Avoid cash advances. Never say never, as emergency situations can call for resorting to any measure, but try to avoid cash advances. Interest rates on cash advances are often higher than the rate on purchases, and you can easily dig yourself into a deeper financial hole.

5. Use credit cards wisely. You should only use your credit card under two conditions. One, you can afford to and will make full payment on all purchases at the end of each month. Two, for emergencies. If neither of these conditions apply, keep your credit card in your wallet.

6. Keep accounts open. Surprisingly, closing a credit card can actually hurt your credit score because your credit score measures available credit versus credit balance. So the more credit you have available that you don’t use, the better your score will be. So feel free to shred unused credit cards, just don’t cancel the accounts.

Be assured that credit isn’t a bad thing. It allows us to make important purchases, such as cars and homes that we couldn’t buy outright. It can also help individuals launch and grow businesses. The key is to maintain a healthy relationship with it so it’s there when you need it.

Want to know more about your credit options? Stop by your KeyBank branch today!

Thomas Holstead manages the Eastchester Branch. He can be reached at (914) 771-4782 or thomas_r_holstead@keybank.com.