Don’t let your debt manage you: Tips for building credit and keeping your debt under control

By Damien Haitsuka, Branch Banking Region Director of North Florida
 
You work hard for your money, and you want to enjoy the financial freedom it can bring, not worry over every penny. But, even in the best of times, carrying debt can cause financial stress. When the economy is less stable, that stress can multiply, and if you don’t manage debt effectively, it can have devastating financial consequences.
 
To alleviate anxiety and put yourself in a stronger financial position, you can take proactive steps like talking to your banker or financial advisor or seeking out resources that can help you prepare for the unexpected. Or you can get started using these tips to help jump-start your credit and financial game.
 

Know the (credit) score
Lenders use your credit score to understand how likely you are to repay a loan, and it’s one part of their decision-making process. Knowing your score also helps you understand your financial position and how much debt you can safely take on. Wells Fargo has online tools for its customers that provide easy access to monthly credit updates and personalized tips. Regardless of what your score is now, knowing it, and understanding how to maintain or improve it, is a critical step in helping you manage your finances and start building a healthier financial future.
 
Start today
No credit score? Don’t worry. You can start building better credit today by opening a credit account — such as a credit card, store card, or loan — and consistently making on-time payments. If you can’t qualify for an account on your own, consider becoming an authorized user on someone else’s credit card (like a spouse or relative) or applying with a co-signer or co-applicant. A co-signer or co-applicant is someone who shares responsibility for your credit account payments. That means the payment history for your account (both positive and negative) may be reflected on both of your credit reports. The key here is having a clear understanding of your financial picture, and opening accounts responsibly. The goal isn’t to start buying things, your focus should be on building good money habits that will put you on the path to financial success.
 
Eat your vegetables and pay your bills
Once you have a credit score, you can enhance your credit by developing good habits. In the same way that exercising and eating well add to your physical health, the right money habits can lead to good financial health. Spending carefully and having a budget are good places to start, but keeping debt manageable requires a little more effort. Prioritizing things like paying your bills in full (on time, every time), keeping balances low, making more than the minimum payment when possible, and paying down existing debt more quickly are good places to start. Looking for lower interest rates and limiting how often you open or close accounts are other habits that may benefit you now and in the future. Alone, they seem like small steps, but combined they can have a powerful effect, and just like a good yoga session, going to the gym, or a good run or walk, they’ll make you feel better today and set you up for better results down the road.


It's okay to ask for help
Asking for help can be difficult, but if you ever have trouble making a payment, you can contact your creditors immediately to discuss your options. You may be able to work out a repayment plan that fits your situation and needs. Wells Fargo customers can visit Wells Fargo Assist℠ if they’re experiencing difficulty making payments on their Wells Fargo account – we may have an option that can help. Regardless of where you bank, don’t be afraid to ask for assistance. One phone call might make all the difference.
 
Understanding how to proactively manage credit and debt can seem intimidating, but it can be easier than you might think if you take the time to understand your current position and don’t try to go it alone. Using the tools and resources available to you will help you take the first few steps and once you start seeing results, you might breathe easier knowing you have the power to manage your debt … and not let it manage you.