Your FICO credit score is an important factor in what kind of loans you can get and the interest you pay on those loans. Lenders look at credit scores to evaluate how likely someone is to pay back the amount they owe in a timely manner. To show potential lenders that you can manage debt, it’s a good idea to have a few credit cards open. You don’t need to carry balances on every card. In fact, it’s better not to carry too many card balances if you’re going to have trouble remembering to pay them off on time.
Related: Financial Behavior to Teach Your Children
That being said, if you’ve had problems with late payments in the past, you need to create a schedule for yourself. The best way to rectify a late payment problem is to start paying on time, right now. The longer you spend paying on time, the better your credit score will be. Your payment history is 35 percent, and rectifying a history of late or defaulted payments is very difficult. Pay your bills as soon as you get them, or set up auto-debit so you don’t have to think about them.
Related: Budget Tips for Moms
Find the gaps in your knowledge about FICO scores. Take Health IQ’s “Test Your FICO Credit Score Knowledge” quiz to educate yourself about FICO scores. Armed with this information, you’ll be ready to take control of your credit, whether you want to improve your scores or use your good scores to get home loans and other kinds of financial assistance.
