Your credit report plays an important role in your financial life. Your credit report is the first place lenders look when you apply for a loan. Renters, auto insurance companies and sometimes cell phone providers and utility companies also review your credit report before deciding to do business with you.

 We want you to have as much success as possible when borrowing money or doing anything else that requires decent credit. Here are three ways to use credit responsibly.

 1.     Pay Your Bills by the Due Date

 Paying bills on time is a major component of your credit report. It tells lenders how likely you are to pay back the money you borrow from them. Late payments also incur fees from your lender, which makes borrowing that money even more expensive.

Late payments stay on your credit report up to seven years, so a few mistakes can have a lasting impact. If you’re struggling with bills, call your lenders and try to change the due dates or lower monthly payments to safeguard your credit.

 2.     Watch Your Credit Utilization Rate

 Your credit utilization rate is the amount of revolving credit (credit cards and lines of credit) you are using compared to the amount of credit available to you. You don’t want to use more than about 30% of your available credit whenever possible. Let’s say you have three credit cards with a collective credit limit of $10,000. Thirty percent of that is $3,000. If you go over that amount, it won’t necessarily kill your credit score. Just be mindful that your score could go down at least temporarily. The key is paying down your balances as much as possible every month to keep that rate lower.

 3.     Do Quarterly Credit Score Checks

 Quarterly checks will help you recognize any fraud on your credit report. They will also help you catch any mistakes made by lenders, which may have lowered your credit score. If you find accounts you did not open on your credit report, contact the credit bureau and freeze your report temporarily. That usually indicates fraud. If you find mistakes from lenders, report those to the credit bureau and also contact the lender directly to clear up those mistakes. You are entitled to three free credit reports every year – one from each of the three major credit bureaus. Get them at annualcreditreport.com.

We’re always here to help our members understand and improve their credit scores. Give us a call or come into a branch if you need help!