Thursday, October 15, 2015

5 Smart Credit Habits You Should Live By

When is the last time you took a long, hard look at your credit habits? Credit cards, loans, and even your monthly bills can be valuable financial tools or dangerous financial traps - it all depends on how you handle them. In honor of National Get Smart About Credit Day, First Bank of the Lake is here to help you develop smart credit habits.

The Importance Of Good Credit Habits

Good credit habits are essential for a number of reasons. They enable you to...
  1. Boost your credit score
  2. Eliminate extra spending
  3. Get lower interest rates
  4. Save money
The benefits of saving money and eliminating extra spending are obvious - you get to enjoy higher numbers in your bank accounts at the Lake of the Ozarks. The benefits of a good credit score may be quite as direct, but they are equally valuable.

Your credit score is designed to help lenders evaluate your trustworthiness - that is, how likely you are to pay back your loan. If you have a higher score, you are considered less of a risk. As a result, you will likely be able to qualify for lower interest rates, which in turn helps you save more money.

Tips For Developing Smart Credit Habits

No matter how old you are or where you're at in life, the right time to start honing your good credit skills is always right now. Here are a few ideas to help you get started.

1.  Pay Your Credit Card Balance In Full Every Month
This is the first and most important rule when it comes to successfully managing your credit card debt. By paying your balance in full every month, you can raise your credit score and avoid having to pay late fees or interest. Making only the minimum payments on your credit card, however, can cause you to rack up significant debts faster than you may realize.

2.  Pay All Your Bills On Time
What happens if you fail to pay your bills on time? In addition to being charged late fees, you risk hurting your credit score; late payments are reported to the credit bureau. You can boost your score (and ease the strain on your wallet) by paying all your bills before their due date.

3.  Treat Your Credit Card Like Cash
A lot of people use their credit cards for bigger purchases that they might not be able to afford if they used cash or a check, but this can pose a serious problem when they are unable to pay balances in full. Instead of racking up high balances with even higher interest rates, you should only use your card to make purchases you could just as easily make with cash.

4.  Keep Your Revolving Debts Low
Think about it: every time you swipe your credit card, you're incurring debt; your credit card company is the one paying for your purchase, with the understanding that you will pay them back when your statement is due. Keeping your credit card balances low can help to boost your score and they are easier to pay off in full. (Treating your credit card like cash is an easy way to keep these numbers down!)

5.  Lower Your Interest Rates
Your interest rates do not have to be set in stone. If you bought a house several years ago, you may want to talk to a lender about refinancing your mortgage so you can get a lower interest rate. If you have credit card debt or a car loan with high interest rates, you may want to consider taking out a personal loan at the Lake of the Ozarks to pay off this debt. You can then make payments on your personal loan (with much lower interest rates).

Need Help? Let Us Know!

Finances are such an integral part of our lives - it's so important that we develop smart credit habits and make it a point to incorporate them into our daily lives. Finding a safe place to store and/or invest your funds is also crucial. If you are looking for a trusted local bank at the Lake of the Ozarks, look no further than First Bank of the Lake. We would be honored to help you with your checking account, savings accounts, or investment accounts at the Lake of the Ozarks. Check out our website to learn more about how we may be able to help you:

First Bank of the Lake - Striving For Excellence
Member FDIC. Equal Housing Lender.

Located at the entrance to the Osage Beach Premium Outlets!
4558 Osage Beach Parkway
Suite 100
Osage Beach, MO 65065
(573) 348-2265

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