Put It On My Tab- How To Use Credit Effectively


When you apply for credit a lender agrees to loan you an amount of money and you repay the loan over a period of time, with interest and other fees. 

If you apply for a credit card and your application is approved you must be able to afford to pay the money back. When approved for a credit card, you’re given a line of credit which is the maximum balance that you can accumulate on the card. If you want to improve your credit score and to use credit effectively it’s always advisable to make sure that you don’t use more than 30 percent of the amount of credit you have available. 

A credit card allows you to carry a balance indefinitely, as long as you can make the minimum monthly payments. You can build your credit score effectively by paying your credit card in full each month.  Avoid paying just the minimum balance you have due. 

Once you start establishing your credit record the credit bureau will keep a record of how you handle your debt repayments. Credit bureaus gather and maintain information about consumers’ credit histories. This information can be used by potential employers and credit providers when you apply for employment or for a form of credit. 

Having access to a credit card comes with a range of benefits, such as rewards and having the option to buy items now and to pay later. If you apply for a personal loan it’s advisable to have a clear plan for how you will be using the loan. You need to read your credit agreement thoroughly and make sure that you understand the terms of the agreement fully. This will make sure that you use credit effectively.


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