Submitted by BECU.
With Financial Literacy Month in April, now is a great time for people to learn about ways to enhance their financial health. As Washington’s largest credit union, BECU is committed to improving the financial well-being of its members and communities in various ways, from offering free financial education articles and webinars, to self-paced courses and member-exclusive resources like its Financial Health Check program.
Another crucial piece to the financial health puzzle is learning how to build or maintain a good credit score. Here are tips from BECU’s Lead Financial Educator Stacey Black:
- Use your credit card responsibly. If possible, try to avoid racking up additional credit card debt or opening new cards to pay for necessities. Turning to credit cards may seem like the simplest solution, especially during challenging times, but in the long-term you could end up paying thousands of dollars in interest – and your credit score will also take a hit.
- Explore your credit options. If you’ve exhausted all other options and do need to open a new credit card, look for low interest rates, low fees and favorable terms. Also, make sure to consider the new monthly payment and its impact on your current and future budget.
- Consider a secured credit card. A secured credit card provides the opportunity to start building credit responsibly and offers all the benefits of a credit card but usually with lower spending limits. The difference is that a secured card requires you to make a security deposit, which is used as collateral in case of default on the loan, and can help people feel more invested to make payments.
- Make payments on time. When your payment is more than 30 days late, it can have a significant impact on your credit score – in fact, late payments can remain on your credit report for seven years. Signing up for automatic payments eliminates the need to “remember” to pay the bill every month and you can easily change the amount as needed.
- Choose the right financial institution. When choosing a financial institution, it’s important to consider every service you may need out of an institution (now and in the future) to help discover the right one for you. For example, factor in potential fees, interest rates, convenience and online banking capabilities.