Time can be a strong ally.

The one thing that everyone wants to have is a better life or standard of living. Now, there are various ways to get to the next level of living. But most people realize that it will certainly involve money. Yet it is not only about money but access to money and credit.

What is credit?

Credit allows you to acquire products, assets, and services now by borrowing from another party and paying the borrowed debt back at a later date.  Of course, one has to manage debt responsibly to thrive. If you can manage your credit wisely, you can see that it will yield impressive results.

Having access to credit does not come easy. Remember that it is necessary to signal that you are a conscientious borrower. If you want generous credit lines, you need to acquire and maintain your credit score. You can do that in several ways. The primary way to do so is to practice exceptional credit habits. 

But how do you do so in a simple way? If you are interested in building your credit and staying responsible, this is what you should know. These different aspects will help you obtain a great score. It will let lenders know that they can lend to you without the worry of repayment.

Implement Autopay to Have Winning Credit Habits

The first step is to ensure that you have valuable credit habits. Most people will note that the best credit habit is to set up autopay. But why is that? If you set up autopay, you have peace of mind.

But if you can set up autopay for your loans and credit obligations, you minimize various costs from penalties. But let us dive a little deeper into this aspect. If you can ensure to eliminate your balance before the closing date, you mitigate utilization. If you can minimize credit usage, you can show creditors that you borrow responsibly.

Simple Facts about the Closing Date

But what is the closing date? Why does the closing date matter to you and the credit bureaus? You are likely to know when to make your payment. Of course, many people have no idea about the closing date. They stay aware of the payment due date to make payments before or on that date.

You do not want to miss your payment due date. If you regularly miss payment due dates, it will show that you are not as responsible. This will make lenders nervous. These lenders will want to ensure that they minimize their risk. They will do so by raising interest rates and charging late fees.

Both of those aspects are bad because you have to pay more out of pocket to borrow money. This does not bode well for future wealth creation or capture value in any way.

The closing date is when your balance is turned over to the major credit bureaus. Now, over 20% of your score will come from your credit usage at this time. If you have a high utilization rate, this can lower your score by over 25 points.

The Closing Date in Action

Let us say you have a payment due date as of the eighth of the month and then the closing is on the thirteenth. You can pay the minimum by the payment due date and the rest before the closing date. If your utilization is low by the closing date, you will do well.

The lower the debt utilization the better for your credit score. The key here is to time your credit card payments to win!


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