How to use credit wisely
Credit is an important tool for anyone looking to manage their finances. Having a good credit score can help you qualify for loans or a credit card. But if good credit habits aren’t followed, you can quickly find yourself with a considerable amount of debt racked up.
We’re here to provide some tips to make sure you’re using credit wisely.
Create a budget
A personal budget, typically set on a monthly basis, is a dynamic financial tool that helps you spend and save responsibly. Creating a budget can be complex, but it is a crucial tool to guide your decision making regarding how and when to make purchases. There are a number of applications and online budget tools available to help manage your budget. Learn more about creating and sticking to a budget here.
Only borrow what you can afford to pay back
Credit cards should not be used to pay for things you can’t afford. Utilizing the budget you’ve set for yourself, make sure you are only making purchases that you know you can pay back in a timely manner. Be wary of offers such as “Buy Now, Pay Later,” on purchases that are too expensive for your budget. While these offers can make a purchase sound affordable, consumers can find themselves in financial trouble when they aren’t able to make the payments on time. Ideally, you should be spending no more than a third of your income on debt (including credit, auto, student, home loans, etc.).
Pay bills on time
Paying your bills on time is important not only for avoiding late fees, but also for maintaining a good credit score. Late payments can spiral consumers into trouble as credit scores are negatively impacted by missed payments.
By partnering with Westfield Bank, you can pay your bills with ease from one convenient platform to manage and track monthly payments. Available through our My Westfield Bank app and online banking, Bill Pay saves you time and gives you peace of mind by making it easier to manage and pay your bills.
Build a good financial record
Besides paying your bills on time and avoiding purchases you can’t afford, it’s also important to use credit regularly for purchases that you can afford. Regular purchases that are paid on time will reflect positively on credit scores and will help you qualify for larger loans. Paying with a debit card or cash doesn’t accomplish this, so be sure to use credit if possible.