A savings account is great for life’s curveballs, but don’t rely only on it to be your safety net. Your credit score will provide the security you need in an emergency. Here are a few tips to help build up your credit score.
In an emergency, your credit cards can serve as secondary emergency funds. Thus, they become a credit safety net. Using your available credit card balances can help you with avoiding depleting your savings account. Keeping a decent chunk of your spending limit available will not only offer you a good lifeline, but can also boost your credit score. Plus, a good credit score can earn you the best rates.
When you need quick, extra cash, a personal loan, might be a good choice. They are good for moderate-sized projects and qualified borrowers don’t need collateral. A good credit score gives you the opportunity to quickly get a personal loan with no collateral and just your signature. Plus, if you pay it back on time every month it’ll continue to help build your credit.
Home Equity Loan.
If you own your own home and have available equity (meaning you owe less than your home is worth) you can take out a home equity loan. This is a one-time lump sum loan, usually of a sizable amount. This can be good for big projects, like remodels, additions, building a shop, or paying off your other higher-rate debt.
Home Equity Line of Credit.
These are much like a home-equity loan, except instead of taking out one big lump sum, you can use the line of credit like a credit card. You can make purchases, pay the balance down each month, and then make new purchases. This is great for regular projects or sizable emergencies.
By using your available credit options, making payments on time, and paying your debt off, you are continuing to build your credit score, which in turn, gives you a safety net to be able to borrow money in the future.
Did you know?
We have a free online Financial Wellness Center with interactive learning modules and calculators to help you master your finances.