Financial Secrets on How to Manage Personal Credit

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Financial Secrets on How to Manage Personal Credit. The word credit means borrowing money or assets with a pledge of future repayment. Paying your bills builds a reputation which later improves credit rating.  There are vast through which you can manage personal credit.  However, you should always be wise when using credit, always go for friendly credit deals and make timely repayments to improve credit rating. After borrowing and repaying, make the initiative of monitoring your credit score and correct any available errors, this may improve your credit score as well.  Here are some of the steps you can take to ensure that you effectively manage your credit.

Come Up With a Monthly Budget To Manage Personal Credit

Before developing any credit, you need to have a budget in mind.  This budget will help you to retain your credit within manageable proportions. You need to come up with a list of your monthly expenses and income and ensure that the two balance. You might, however, need to have an income surplus at the end of each month.

Look for the Best Personal Credit Card Offers

You may need to do sufficient research before signing up for any credit offers available.  Always make an inquiry about the term and conditions before signing up for any loan.  You may need to consider the following before signing up for a credit offer. 

  • Annual percentage rate: This refers to the yearly payable interest you might have to pay your balances.  If you opt to pay your balance in full monthly, most credit cards will relieve you the burden of paying annual interest. 
  • Penalty AP: Late payments will, in turn, attract penalties. You need to find out the rate at which a credit card is going to increase your rate should you delay to repay before making a choice.
  • APR for balance transfers: It is possible to transfer your debts from one of your credit cards to the other. Try and find out whether your selected credit card offers a promotion at 0%. 
  • Fees: Most credit cards do access many fees for cash advance transfers and delayed payments.

Know Where Personal Loans Are Better Alternatives.

Personal loans are, in some ways, better options than credit cards. Private loans will generally come with a lower interest rate compared to credit cards.  This because personal loan allows you to make equal payments for your loan over a given period.  Credit cards, on the other hand, have higher upfront payment, which tends to go down until the entire amount gets paid.  For longtime financing, personal loans are much better than credit cards 

Avoid Payday Loans

Payday loans are short term loans that are usually issued out without reference to your credit status.  The only disadvantage of payday loans is that they charge high-interest rates.  Some payday loan lenders will even demand you grant then access to your bank account so that they can make withdrawals themselves should you fail to pay back their money.   Try and avoid payday loans at all costs and consider any available options and only go for payday loans when you are completely desperate.

Be Wary Of Cash Advances.

Instead of taking your money from the ATM when you need cash, try and find out if you can get money from elsewhere.  Even though cash advances are not as bad as payday loans, they too charge high-interest rates.  These rates might just put you in deeper debt than you were before borrowing.  For instance, if you choose to go for a cash advance, then it means interest accrues immediately.  This is unlike the case with credit card companies which give you a purchase grace period.  Cash advances will never allow you a grace period.

Pay More Than The Minimum.

If you choose only to pay the minimum, then it will probably take you longer to pay off your credit card balance. Spending more than the minimum monthly will significantly reduce your interest amount. The statement from your card should be able to tell you just how long it will take to pay off your debt with the minimum payment only.

Debt consolidation

When you choose to consolidate your smaller debts, it is another appropriate way to manage personal credit, you may find yourself in a position to borrow a more substantial loan which comes with more favorable terms. 


If you manage personal credit properly, that will, in turn, improve credit rating from your lender. The above steps should help you achieve your loan properly. However, always borrow when it is necessary to borrow little and pay back on time to improve credit rating.