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Fives Ways You Unknowingly Impact Your Credit (Part One)

By: Michael Millington


Using credit may be a subject of thought that barely passes through your mind. Or it might be something you think about constantly. Such is how the use of credit is perceived among today’s individuals. Now, more than ever, people are taking more notice over how their credit is utilized and what they’re doing to alter it (for better or for worse). That being said, many still don’t know what they’re doing to make their credit rating fluctuate on a regular basis. Newer forms of credit checking can give you broad ideas about what influences your credit, but let’s understand the everyday actions behind those influences.

 

  • Putting Everything On Credit

Depending on who you speak to, using credit to pay for everything is either the smartest thing you can do or the dumbest thing you can do. Because credit cards usually hold much larger balances than what we hold in cash on any given occasion, many people stick to using their credit cards for huge purchases, i.e. vacations or medical emergencies.

However, there are some who use credit cards to purchase everything they buy in a given month, from oil changes to a cup of coffee. While this type of constant use isn’t the generally accepted way one should use a credit card, it does have its benefits. Making multiple small purchases and paying them off each month would provide positive data for your credit report. Having a perfect payment history counts immensely towards your credit worthiness.

 

  • Making Early Payments (Multiple Monthly Payments)

Credit cards normally come with interest rates that will add money to your bill should you maintain a balance. Some people avoid this by making full balance payments when the bill comes due. Others try to make multiple payments in a month to coincide with their pay schedule. While it’s not the worst idea, making multiple payments in a single month, there are a few things you should know before you do.

The main issue with making multiple payments in a month is the general misconception that it’s beneficial. There’s no benefit in making many payments in one month over making your regularly monthly payment. The fact that you paid on time is what is important to credit reporters, not how many time you’ve paid in the month. Moreover, making multiple payments in a month can end up putting a strain on your finances due to a lack of consistency. In making multiple payments in a month, some forget to pay off the entire balance or to meet the minimum by the time payment is actually due, thus causing your credit rating to suffer. Making one payment can be the best thing to do to keep your budget, your financial habits, and your credit  stable.

 

Make sure to check back for the second part of this article, including three more ways you may be impacting your credit.