How to Build Good Credit

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Know Your Limit

Obey your credit limit. Exceeding your limit may be deemed a violation of your account agreement and may result in additional fees or penalties, an increased interest rate, or the freezing or cancellation of your account. Your current limit is usually shown in a box or on a line labeled "Available Credit" on your monthly statement, such as in this example from a Provident Credit Union online Visa eStatement:

available balance illustration

Pay on Time

Whether you choose to make the minimum payment or to pay the total outstanding balance, your payment must reach the financial institution or business by the payment due date. Otherwise, you could incur late fees, and you may damage your credit history.

Stay in Good Graces

Many payment cards offer a grace period within which you can pay off the total balance of your account and avoid any finance charges. In a way, it's like an interest-free loan for a limited period of time, because purchases paid off within the grace period do not accrue interest. In fact, many consumers pay their balance in full during this period. Beware, however, of payment cards that accrue interest from the date of the transaction (Provident Credit Union Visas include a 25 day grace period).

Get to Know Your APR

Because different institutions often use different systems for computing finance charges, your APR (annual percentage rate) is a valuable number to know. If you plan to carry a high balance on your account often, it may make sense to shop around for a low APR, even if you must pay a higher annual cardholder fee. On the other hand, if you usually pay off your balance each month, then the APR makes less of a difference than the annual fee. Provident Credit Union Visas combine a low rate with no annual fee. Click for Provident Credit Union Visa Rates.

Keep in Touch

If you change your name, address, or job, notify your lending institution immediately. Your payment could turn into a late payment in the time it takes for a statement to be forwarded to your new address by the postal service. Also, contact your lender if you cannot make a payment on your account for any reason. Special payment options or agreements may potentially be arranged that will satisfy both you and your lender, while keeping your credit history intact.

To contact Provident Credit Union with changes, call us at (800) 632-4600, or visit your local Provident community branch.