Ways to Create and Maintain Healthy Credit
Are you only able to make the minimum payment on your credit card? How much debt do you have compared to your income? How many credit cards do you have? These are some of the questions that will help you understand your financial situation so that you can take action and manage your credit.
Review your current situation.
Before you make a plan to get out of debt, understand your financial picture. Review all of your outstanding debt including your mortgage, car payments, credit cards, and other loans. This will help you determine your priorities and what debt has become the most difficult to manage.
Make a budget.
Write down all your sources of income and your expenses. Then, determine how you can cut back on what you’re spending.
Know your credit score.
Personal Digital Banking clients enjoy complimentary access to Credit Score by SavvyMoney®. Found in both personal digital banking and our mobile app, Credit Score by SavvyMoney® provides free access to your latest credit score and reports, real-time credit monitoring and more.
Take Action and Make a Plan
Consider the following options:
Consolidate your debt.
Rolling all of your debt into a single loan may reduce your monthly payments, and having just one bill will make tracking and payments easier. If you’re a homeowner, you have the additional option of consolidating debt through home equity financing or refinancing. This may allow you to save even more with possible tax-deductions1. Click here for more information on home equity.
Refinance your mortgage.
If interest rates have dropped since you took out your mortgage, consider refinancing to lower your monthly payments. Consult a Sandy Spring Bank mortgage banker for current rates and refinancing options.
Pay off your debt with the highest-interest first.
First pay off the balances of loans, lines of credit, and credit cards with the highest interest rates. Continue to pay at least the minimum due on your other accounts.
Call your creditors.
If you are unable to pay your bills or need to make a partial payment, you may be able to work out payment plans you can afford.
See a credit counselor.
To help identify additional options and plans to improve your financial status and repair credit, seek the advice of a reputable credit counseling agency.
1Please consult your tax adviser regarding tax deductibility.
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