CREDIT 101: It's easier to build good credit when you've got a plan
MANAGING YOUR MONEY
Stay well below your credit limit – you ideally want to use only around 25% of your total credit. If you get too near to your limit, potential lenders might see it as a red flag.
Make sure to pay off high-interest balances first to reduce interest charges. Your interest rate is also commonly known as your APR.
Create a budget to help you control spending and avoid impulse purchases.
Try to keep your card balance low. You’ll pay less money in interest and you’ll be able to pay down your credit card bill more quickly. Plus, it will show potential creditors that you can use and pay off your card responsibly.
Keep an eye out for fraud: if you see a purchase you don’t recall making, investigate it! Call your issuer and ask for help in resolving the issue.
Make a commitment to cut back unnecessary expenses—small purchases add up over a few weeks or months.
Remember, you have to pay for everything you buy – don’t spend more than you can afford to pay back.
Protect yourself from fraud by signing your card immediately when you receive it in the mail, and notify the card issuer if you have a change of address or plan to leave the country.
Keep 3-6 months’ expenses in a savings account that you commit to only using for emergencies.
How JourneySM Can Help
The Journey card offers mobile and e-mail tools to help you stay on track of your balances and due dates.
Visa’s® Zero Liability Protection for lost or stolen cards offers extra security, so you’re covered if your card is lost or stolen.
With no annual fee and no foreign transaction fees, the Journey card helps you build credit without worrying about these common fees.
PAYING YOUR BILL
Paying your bill on time is one of the most important factors in building a good credit history.
Make the highest possible payment you can each month. The lower the unpaid balance you keep, the less you'll pay in interest.
Pay off any other bills, tickets or fines that you may receive. Even small fines can drop your credit score by as much as 100 points if sent to a collection agency.
If you accidentally miss your payment due date, you’ll want to make up for it ASAP — it may be up to 30 days before a missed payment is reported to credit bureaus.
Pay your bill at least five days before your due date to make sure your payment is processed by the due date.
Make extra payments when possible to help pay down balances and save money on interest charges.
Missing a payment will not only result in costly late fees, but could lower your credit score and damage your credit history.
Set up online banking so you can access your account 24/7 whenever or wherever you need it.
Your APR is the annual interest rate you are charged on your unpaid balance. If you don’t pay off your balance in full each month, your APR will determine the amount of interest you will pay.
How Journey℠ Can Help
The Journey card offers an incentive to keep you on track: a 25% bonus match on your 1% cash back just for paying your bill on time each month.
The Journey card offers text or e-mail alerts to help you stay in control.
By using your Journey card responsibly now, you can enjoy a stronger credit history in the future.
UNDERSTANDING CREDIT
A bad credit history can cause you to lose out on apartments, jobs and other goals because lenders might view you as irresponsible.
Know and watch your credit score – a low score can mean a failed credit check. It is tracked at three credit agencies: Equifax, Experian and Transunion.
Credit scores range from 300-850. The higher your score, the better!
Prospective lenders, landlords and employers often check your credit score to determine your credit-worthiness.
You can get one free report (a summary of your credit history and activities) per year from the three major credit bureaus by going to www.annualcreditreport.com.
Your credit score is based on key information in your credit report, which includes your monthly obligations such as rent, utilities or student loans.
Your credit score generally measures 5 criteria: length of credit history, types of credit lines, payment history, amounts owed on credit lines, and new credit lines opened (how many and over what period of time).
Make sure to review your credit report from each of the three bureaus to check for identity theft or potential errors.
Don’t make multiple credit applications within a 6-month period – several applications close together can be a red flag to potential creditors.
How Journey℠ Can Help
The Journey site has access to tools that can help you understand how credit works.
By getting an early start on building credit responsibly, you can have a stronger credit score later on.
Visa® credit cards are accepted at millions of places, so you can use your credit wherever you need it.