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How to Build (and Maintain) Good Credit

January 25, 2023



The start of each new year is a time for us to reflect on the past year and plan for the next. 2022 was a challenging year for a lot of reasons, not the least of which was record-high inflation that had plenty of people tightening their budgets. As we head into 2023, I'd like to offer some tips to help you establish and maintain good credit so you can enjoy a brighter financial future.

Open a Checking Account

While a checking account can't help you improve your credit score, it does help you balance your budget while you're establishing a credit history. By making credit card and loan payments with your checking account, you will see all of your monthly transactions on a single bank statement rather than having to compare several different statements in order to get a full view of your financial situation.

Another benefit of checking accounts is that most come with a debit card. Using a debit card along with your credit card is safer than paying with cash, since banks offer fraud protection and card controls to help prevent negative impact to your credit if your card is lost or stolen. Make sure to monitor your credit and bank statements regularly, so you can correct any errors and detect signs of potential identity theft.

Automate Bill Payments

One of the easiest ways to damage your credit is to fall behind on loan or credit card payments. Thankfully, most banks (New Tripoli Bank included) offer automatic bill pay through their online banking platforms to ensure that your monthly bills are paid.

An emergency fund is helpful for staying ahead of your bill payments. A good rule of thumb is to set aside enough money to pay for six months of living expenses so that, in the event of an emergency, you can absorb unexpected expenses and avoid penalties for late payments. Thankfully, most banks' online banking platforms allow you to set up automatic, recurring transfers between accounts, so you can set aside a portion of each paycheck for a rainy day into a dedicated emergency savings account.

Show Stability in Your Credit Use

As you work to maintain your credit, you should seek to develop a good mix of credit—for example, paying down a mortgage loan plus credit card payments—to demonstrate that you can manage different types of credit, which can improve your credit score. It is also better to pay down your credit gradually instead of immediately paying off your debt all at once, as it shows you are capable of making payments on time.

If you are planning to use credit for a large purchase, you should adjust your credit usage leading up to the purchase. For at least three to six months prior to your purchase, you should focus on paying down existing debt and avoid incurring new debt.

By establishing these spending and saving habits early, you'll be able to make your money work for you so you can speed up your recovery from temporary financial roadblocks and remain financially healthy. If you are concerned about your financial wellness, New Tripoli Bank offers checking, savings, and lending options to help you navigate pivotal financial milestones and plan for your financial future. Reach out to one of our friendly community bankers who can help steer you in the right direction for 2023.

Kate Small

Kate Hart-Zayaitz is New Tripoli Bank's Chief Lending Officer and Senior Vice President. Kate has spent many years working for various community banks in our area. She was born and raised in Emmaus and has been involved with multiple banking and economic organizations throughout the Lehigh Valley.

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