Starting or building your credit can feel overwhelming but if you take the steps to start your credit journey the right way it will be very beneficial in the long run. Your credit report represents your history of borrowing money and includes the amount of debt you owe, your credit utilization, length of credit and most importantly your payment history among other key pieces of your credit behaviors. If you are starting or building your credit, there are steps you can take now to begin your journey right.

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  1. On-Time Payments: Making full- and on-time payments each month, will save you on late fees and higher interest rates associated with credit cards. Your payment history is one of the main factors that attribute to your overall credit score. When applying for new credit, creditors weigh your payment history as one of the top factors when considering if they will issue you credit. If you find it hard to remember to make your payments on-time every month, consider enrolling in automatic payments. You can set the payment date and payment amount that is automatically drafted each month to help ensure you are making on-time payments. It is important to ensure that your automatic payments are setup to be drafted on or before the monthly due date and the payment amount is at least the minimum amount due each month.
  2. Strive for Good Credit Utilization: Keep the amount of credit used in relation to the total credit limit below 30%, anything above that can show signs of financial stress. Watch the total amounts owed on revolving accounts. By carrying large dollar amounts on revolving accounts, it can show an inability to pay that debt back.
  3. Be Responsible: Once you start building your credit file, it is important to be responsible and manage your credit across the various types of accounts (i.e. credit card, vehicle loan, mortgage, installment loan, etc.). This shows strong money management, which can continue to build your credit in a positive way.

Always pay on time, and never spend more than what you are confident you can pay off by the due date. You will not build your credit overnight but having the right financial habits now is important. To learn more on the benefits of a good credit report, click here. If you are looking to start building credit, you can learn more about the Arvest OriginTM Credit Card.