fbpx Skip to content

Using Credit Wisely

As a Financial Tool, Credit...

  • Allows you to pay for things you could not afford with cash, such as a college education, new vehicle, or your first home.
  • Helps you build a credit reputation — summarized in a credit report — that employers, landlords, future lenders, and other businesses often consider as they make decisions about you.
  • Can also be dangerous if misused. Some individuals falsely view credit as a license to spend. In addition, poor spending habits can leave them deeply in debt and damage their credit reputation for years to come. Begin your journey to understand credit by clicking the button below.
Using-Credit-Wisely-2
Using-Credit-Wisely-3
Primary Text Separator for Milspouse Money Mission, Financial Education for Military Spouses
Primary Text Separator for Milspouse Money Mission, Financial Education for Military Spouses

Using Credit Wisely

As a Financial Tool, Credit...

  • Allows you to pay for things you could not afford with cash, such as a college education, new vehicle, or your first home.
  • Helps you build a credit reputation — summarized in a credit report — that employers, landlords, future lenders, and other businesses often consider as they make decisions about you.
  • Can also be dangerous if misused. Some individuals falsely view credit as a license to spend. In addition, poor spending habits can leave them deeply in debt and damage their credit reputation for years to come. Begin your journey to understand credit by reading the four tips below.
Primary Text Separator for Milspouse Money Mission, Financial Education for Military Spouses
Military Spouses - Financial Planning - Measure Progress

Understand Credit 101

Practice Healthy Credit Habits

 

Using credit responsibly can help boost your overall financial well-being. Here are some tips to establish a healthy credit reputation:

  • Set up and follow a budget so you don't accidentally run up debt.
  • Pay bills on time. Do not skip payments.
  • Pay off credit cards in full each month. If you must carry a balance, keep it as low as possible.
  • Do not apply for credit you do not need.
  • Keep credit card and loan information in a safe secure place to reduce the risk of identity theft.
  • Keep your receipts and compare charges when your billing statements arrive. Call your company immediately if there is a discrepancy.

 

Monitor Your Credit Report

 

Your credit report is a record of your payment history with creditors. It is this report that employers, lenders, landlords, insurers and other businesses often evaluate to make decisions about your creditworthiness.

It shows the following:

  • How much credit you are using
  • How well you pay your debts
  • Who is inquiring about your credit
  • Information on bankruptcies or federal income tax liens

You can request your free annual credit report through the Annual Credit Report Request Service, a centralized contact point created by the three nationwide consumer reporting agencies: Equifax, Experian and TransUnion. Review your credit report annually for accuracy and any changes that may indicate fraudulent activity.

If your credit score is high enough, you may qualify for the best rate on a loan or credit card account. A low score may cause you to be denied credit. Depending on the credit scoring model, scores may range from 300 to 850. Most lenders consider scores above 660 to be a good credit risk, while scores below 600 may indicate credit problems.

No single factor determines your score. But one or more of the factors may affect the final score more than others, depending on the overall information in your credit report.

Your score today could be different from your score three months from now. Ordering a copy of your own credit report or credit score does not impact your score.

Lenders use different credit scoring models depending on the type of credit for which you are applying. Still, you can obtain an educational score from any number of sources (sometimes for a fee) to give you a directional snapshot.

 

Choosing a Credit Card

 

Credit cards get a lot of people into deep financial trouble. However, if you use them well, credit cards can also have a positive impact on your financial life. Here are some guidelines to keep in mind if you open a credit card account:

  • Minimize Rates and Fees: Search for a card with no annual fee and low interest rates. Beware of low introductory rates that balloon after a time. Always check the rates of competing credit card companies. They may be a better option for you in the long run.
  • Always Have a Plan: Even though it doesn't take much thought to simply reach for your card and pay for things, don't ever use your card without thinking first.
  • Avoid Cash Advances: Most credit cards charge high interest on cash advances as soon as they post to your account. It's best to avoid using this feature.

Finally, don't use a credit card as a license to spend now and pay later. Credit cards should typically be used for convenience and safety. Avoid the temptation to spend money you don’t have.

 

Paying the Minimum Is Costly

 

Always pay more than the minimum. In the following illustration, paying the minimum each month will take approximately 22 years to pay off the balance. In fact, it will actually cost you more than twice the original charge. Increasing what you pay by as little as $10 or $20 each month will make a huge difference. Just by paying a little more each month, you can save thousands of dollars in interest costs and cut years off your repayment time. To understand credit even better, analyze the chart below.

 

Primary Text Separator for Milspouse Money Mission, Financial Education for Military Spouses

Sign Up!

Subscribe to our blog

Primary Text Separator for Milspouse Money Mission, Financial Education for Military Spouses

Watch

The-Pros-And-Cons-Credit-Cards
What is a Credit Score?
Credit Report ABCs
Why Is Credit Important
The Journey to Good Credit

Dig Deeper

Credit-Fix-Scams
Create a Budget PDF
Primary Text Separator for Milspouse Money Mission, Financial Education for Military Spouses
Military Spouses - Financial Planning - Measure Progress

Understand Credit 101

Practice Healthy Credit Habits

 

Using credit responsibly can help boost your overall financial well-being. Here are some tips to establish a healthy credit reputation:

  • Set up and follow a budget so you don't accidentally run up debt.
  • Pay bills on time. Do not skip payments.
  • Pay off credit cards in full each month. If you must carry a balance, keep it as low as possible.
  • Do not apply for credit you do not need.
  • Keep credit card and loan information in a safe secure place to reduce the risk of identity theft.
  • Keep your receipts and compare charges when your billing statements arrive. Call your company immediately if there is a discrepancy.

 

Monitor Your Credit Report

 

Your credit report is a record of your payment history with creditors. It is this report that employers, lenders, landlords, insurers and other businesses often evaluate to make decisions about your creditworthiness.

It shows the following:

  • How much credit you are using
  • How well you pay your debts
  • Who is inquiring about your credit
  • Information on bankruptcies or federal income tax liens

You can request your free annual credit report through the Annual Credit Report Request Service, a centralized contact point created by the three nationwide consumer reporting agencies: Equifax, Experian and TransUnion. Review your credit report annually for accuracy and any changes that may indicate fraudulent activity.

If your credit score is high enough, you may qualify for the best rate on a loan or credit card account. A low score may cause you to be denied credit. Depending on the credit scoring model, scores may range from 300 to 850. Most lenders consider scores above 660 to be a good credit risk, while scores below 600 may indicate credit problems.

No single factor determines your score. But one or more of the factors may affect the final score more than others, depending on the overall information in your credit report.

Your score today could be different from your score three months from now. Ordering a copy of your own credit report or credit score does not impact your score.

Lenders use different credit scoring models depending on the type of credit for which you are applying. Still, you can obtain an educational score from any number of sources (sometimes for a fee) to give you a directional snapshot.

 

Choosing a Credit Card

 

Credit cards get a lot of people into deep financial trouble. However, if you use them well, credit cards can also have a positive impact on your financial life. Here are some guidelines to keep in mind if you open a credit card account:

  • Minimize Rates and Fees: Search for a card with no annual fee and low interest rates. Beware of low introductory rates that balloon after a time. Always check the rates of competing credit card companies. They may be a better option for you in the long run.
  • Always Have a Plan: Even though it doesn't take much thought to simply reach for your card and pay for things, don't ever use your card without thinking first.
  • Avoid Cash Advances: Most credit cards charge high interest on cash advances as soon as they post to your account. It's best to avoid using this feature.

Finally, don't use a credit card as a license to spend now and pay later. Credit cards should typically be used for convenience and safety. Avoid the temptation to spend money you don’t have.

 

Paying the Minimum Is Costly

 

Always pay more than the minimum. In the following illustration, paying the minimum each month will take approximately 22 years to pay off the balance. In fact, it will actually cost you more than twice the original charge. Increasing what you pay by as little as $10 or $20 each month will make a huge difference. Just by paying a little more each month, you can save thousands of dollars in interest costs and cut years off your repayment time. To understand credit even better, analyze the chart below.

 

Primary Text Separator for Milspouse Money Mission, Financial Education for Military Spouses

Sign Up!

Subscribe to our blog

Primary Text Separator for Milspouse Money Mission, Financial Education for Military Spouses

Watch

The-Pros-And-Cons-Credit-Cards
What is a Credit Score?
Credit Report ABCs
Why Is Credit Important
The Journey to Good Credit

Dig Deeper

Credit-Fix-Scams
Create a Budget PDF
Primary Text Separator for Milspouse Money Mission, Financial Education for Military Spouses

Recent Blogs

Tackle Unexpected Expenses with an Emergency Fund and Help from Relief Societies

October 28, 2019

One of life’s certainties is that it is uncertain, right? Life throws curveballs in the form of unforeseen circumstances, which often bring unexpected expenses. A lost job, vehicle or home repair, health costs, or emergency travel are a few examples. When these events occur, they can create havoc for a family’s financial stability. However, planning…

Read More

Reimbursement for Relicensing Fees Is Here, Milspouses!

September 26, 2019

Reimbursement for Relicensing & Certification Fees for Military Spouses The Department of Defense (DoD) recognizes the challenges many military spouses face maintaining a career while moving every few years. So, it introduced the 2018 National Defense Authorization Act, which allows each branch of service to reimburse up to $500 for qualified relicensing or certification fees…

Read More

5 Steps for Sending Your Military Kid Back to School on a Budget

August 19, 2019

Back to School on a Budget It’s back to school time! And while parents may be breathing a collective sigh of relief, it might be a different story when it comes to their wallets. According to a survey by the National Retail Federation, families with school-age children will spend an average of $696.70 this year…

Read More

Changes to the Post-9/11 GI Bill’s Transferability Rules Coming January 2020

July 31, 2019

Post-9/11 GI Bill Transferability Rules Significant changes were made to the transferability rules for the Post-9/11 GI Bill, which were to become effective in July 2019. However, the Pentagon recently delayed these changes until Jan. 12, 2020. It is important to act now if these changes impact you and your family. Transfer Post-9/11 GI Bill…

Read More

Stay Career Competitive with a MyCAA Scholarship

July 24, 2019

As military spouses, we know firsthand how challenging it can be to stay competitive in the workforce. Staying competitive could mean we juggle completing a degree, training or license while taking care of our families. Periodic moves followed by job searches in new locations often complicate our career goals. Money for Professional Pursuits Fortunately, the…

Read More

Put Post-9/11 GI Bill Benefits to Work for You, MilSpouses!

July 15, 2019

The Post-9/11 GI Bill is a great benefit for service members and their families to help pay for college, a certification, or other types of training. The active duty or selected reserve service member must transfer GI Bill benefits to his or her spouse and/or dependents while actively serving. New rules go into effect January…

Read More

Top 10 Reasons to Love and Appreciate Military Spouses

May 7, 2019

May 10, 2019 May 10 is Military Spouse Appreciation Day. So, this month, MilSpouse Money Mission™ is honoring military spouses for their service and sacrifice at home with the top 10 reasons to love and appreciate military spouses. Military spouses keep their families moving in the right direction. On average, military families move every two…

Read More

Blended Retirement System: A Guide for Seasoned Spouses

April 17, 2019

The Blended Retirement System: By now, many military spouses have heard a great deal about the new Blended Retirement System, also called BRS. This system went into effect Jan. 1, 2018. It is important to know that it does not affect everyone the same way. Even if the BRS does not apply to you directly,…

Read More
Primary Text Separator for Milspouse Money Mission, Financial Education for Military Spouses
Scroll To Top