5 Tips for Managing Your Credit

October 18th, 2018

Get Smart About Credit Day

In recognition of Get Smart About Credit Day, we’d like to offer a few tips that may help you manage your credit wisely and lay a foundation for long-term financial security.

1. Know your credit report.

A good credit report may be able to help get you a better rate on loans, insurance policies, and even cellphone plans. There are three credit reporting companies in the United States. By law, you are allowed a free credit report from each once every 12 months. These reports don’t include your credit score, but allow you to make sure nothing unusual or fraudulent is affecting your score. Many credit card and loan companies, as well as other resources, allow you to check your credit score annually or even monthly. 

2. Research the best credit card for your needs.

Different credit cards offer different annual percentage rates (APRs) and different benefits. Therefore, you should consider what’s most important to you—cash back, points for travel, no foreign transaction fees, low APR, interest-free for a set amount of time, etc.—before signing up for a card.

3. Pay your monthly credit card bill in full.

When used responsibly, credit cards can be a great tool for convenience, security, and building credit. By paying off your credit card bill in full each month, you will avoid paying interest charges and may be able to improve your credit score. If you find you can’t pay your bill off in-full monthly, try to pay more than the minimum amount due.

4. Always pay your bills on time.

Paying on time is one of the most important things you can do to improve your credit score. Using autopay is a great way to avoid missing payments. If you pay your bills manually, make sure to set up reminders for yourself when a payment is due.

5. Keep your debt-to-income ratio as low as possible.

Your debt-to-income ratio is a key indicator of your financial health. To calculate your debt-to-income ratio, add your monthly debt payments (credit cards, school loans, etc.) and housing expenses, and divide by your monthly gross income. Having a low debt-to-income ratio may help you get lower interest rates and can make repaying debt easier.

If you’d like more information or personalized advice, First Interstate is here to help. Stop by any of our branches or call our Client Contact Center at 1-855-342-3400, and one of our bankers will be happy to give you a hand.