Establishing and improving your credit

Kathy Wright & Marissa Rigali

By Kathy Wright and Marissa Rigali

Having good credit should be a goal for anyone, since bad credit could affect your ability to qualify for a loan for anything from college costs to a car to a mortgage.

If you have good credit, not only will you be better able to secure a loan or mortgage, you’ll also generally be eligible for lower interest rates, which can reduce how much you owe.

The key to establishing good credit is to be patient. You’ll need to show consistency in the way you’ve managed money over a period of time. With that in mind, here are some tips to help establish and improve your credit.

If you don’t have a credit card, apply for one. A credit card from your bank or a secured card with a credit limit tied to your savings can help you establish credit. But remember that each type of card has its own expenses, like annual fees or extra fees for late payments.

Do your homework before you apply for any type of credit card. If a credit card offers an introductory period with no interest, for example, make sure you know when that ends and what the interest rate will be in the future.

Pay your bills on time. It’s important that you make each month’s payment on your bills like credit cards or car loans. Keep your credit card balances at low, manageable levels. Having large balances can hurt your credit score and also make it more difficult to pay back your debts.

Use your card occasionally to maintain a positive credit history, but don’t rely on it to pay for everything, or treat it as “free money.” Try to pay off any balances the following month so you aren’t accruing interest on your charges.

When you’re applying for something like a mortgage, you’ll need to show that you can pay off an open-ended loan, which is a loan you borrow from over and over, like a credit card. You’ll also need to show you can pay off a closed-ended loan, like a car loan where you have to pay off the total loan within a set timeframe.

Understand other factors that can affect your credit score. Having too high a balance on your credit cards can hurt your credit score, too. If you have too much debt or are too close to the maximum balance on your credit card, creditors will wonder how you would pay your mortgage or car payment if you unexpectedly lost your job, for example. Keep the balance on a credit card small and pay most of it off each month.

Canceling credit cards can also lower your credit score. You don’t need to use a card all the time for it to positively impact your credit score. So instead of canceling a card, think about using it periodically to make a small purchase, and then pay off the entire balance the next month, keeping the card active.

For more information on strategies for establishing and improving your credit, visit USAmeriBank’s “ConsumerU” online at

Kathy Wright (NMLS ID 517479) is a Senior Vice President, Retail Market Manager at USAmeriBank. Wright has more than 35 years of banking experience in retail and wealth management serving the St. Petersburg area.

Marissa Rigali (NMLD ID 364663) is a CRA Mortgage Loan Originator, specializing in helping first-time homebuyers throughout the Tampa Bay area. For more information on qualifying as a first-time homebuyer, call 727-288-6100. USAmeriBank (NMLS ID 456668).

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