October 27, 2022

Three Ways to Use Credit Responsibly

Your credit report plays an important role in your financial life. Whether you’re trying to get a new loan or a lower interest rate, your credit report is the first place lenders will look. 


We want you to have as much success as possible when borrowing money, so here are three ways to use credit responsibly and wow your potential lender.


  1. Pay Your Bills by the Due Date

Paying bills on time is not always easy to do. Unfortunately, late payments stay on your credit report for up to seven years and play a major role in raising or lowering your credit score. Even if you can only make the minimum payment sometimes, pay those bills on time. If you’re struggling with bills, contact the companies you have to pay and see if you can change the due date or lower monthly payments.


  1. Control Your Debt-to-Income Ratio

It’s ok to owe money, but owing too much money will lower your credit score. Lenders calculate your debt-to-income ratio (debt relative to income) when you apply for a loan. Take the sum of all your monthly payments, divided by your gross monthly income, to calculate. Most lenders like when your debt-to-income ratio is no higher than 30%. That means all of your monthly loan and credit card payments combined equal 30% or less of your total monthly income.


  1. Do Quarterly Credit Score Checks

Quarterly credit checks will help you monitor your accounts for fraudulent activity. Since identity theft usually leads to a dropping credit score, you’ll notice it and can freeze your credit temporarily. You can do a free credit score check every three months in your Kelly Community mobile app or online banking.

Here’s how:

  • Click on the menu button.
  • Select “My FICO Score.”
  • That’s it!


We’re always here to help our members understand or improve their scores. Give us a call or come into a branch if you need help!

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