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billsIf you were asked today to explain what reports to your credit bureau and how it affects you, could you? Money is one thing that we cannot survive a day without – our needs and goals are driven by it. Unfortunately, it’s also the one subject that isn’t taught in school. Children learn how to cook, how to make vases in wood shop, how to change the oil in a car... but they don’t learn about finances. There’s no budget planning, no education on maintaining good credit... and yet cash rules everything around us.

How well you manage your finances is tracked through credit reporting companies such as Equifax and TransUnion. Your credit score is a judgment about your financial health, at a specific point in time.

It indicates the risk you represent for lenders. There are different ways to work out credit scores: Equifax and TransUnion use a scale from 300 to 900. High scores on this scale are good. The higher your score is, the lower the risk for the lender.

Here are some simple tips for maintaining good credit:

- Your installment payments should always be made first, and paid in full. These are: mortgage or rent payment, loans.
- A payment should always be made on time to your revolving debts. You don’t need to make the full minimum payment, but you do need to make A payment (even just $5 will suffice). This prevents you from receiving a late payment mark.
- Try to keep your balances on your credit cards and lines of credit below 50% of the limit.
- Try to keep your overall debt loan below 20% of your annual income.
- Keep only two trade lines (ie: 2 credit cards, or a line of credit and a credit card) that have a minimum limit of $1500 each.

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