Skip navigation.
Go to the Principal Financial Group(R) home page
Secure  Account Login

Select login type:


6 Ways to help build good credit

A solid credit score can increase your options. These tips may help you build yours.

It's hard to believe that a little piece of plastic can play such a big role in your financial life, but credit cards — and the ways you use credit — pack a lot of power.

With a strong credit history, you can be more likely to secure more attractive loans for big-ticket purchases such as a home or vehicle. And being mindful about how credit fits into your overall financial strategy may help you pave your way for a better retirement — even if that's years down the road.

It's all about self-control. "People who are successful in positioning themselves for retirement are disciplined," says Jim Schaffer, Jr., AIF®, CRPC® and private wealth financial professional for Lincoln Financial Advisors Corp. in Cleveland, OH.

Tips to channel that discipline to help build and strengthen your credit include:

  1. Shop around. Before applying for a card, do your homework. Compare introductory rates (and how long they last), ongoing rates, annual fees, grace periods and rewards to avoid expensive surprises later on.
  2. Start slow. If you're applying for a new card, look for one with a low limit — ideally just $250 to $500 — so you can't overextend yourself, Schaffer suggests.
  3. Consolidate. Just as Schaffer encourages his clients to consolidate multiple retirement plans into one easier-to-manage account, he suggests the same approach for credit cards: Carry only one or two. "If you have five cards, chances are you won't look at any of your statements, which can lead to more serious problems," he says.
  4. Charge wisely. Make only charges you know you'll be able to pay off on your next statement, except in cases of emergency. "Don't get in the mind-set of buy now, pay later," says Schaffer. Deduct all charges in your check register to better track your spending.
  5. Pay on time. Following the issuer's payment instructions, pay credit card bills before the due date to avoid late fees and, consequently, damage to your credit score. Or, pay the bill as soon as your statement arrives. Better still, set up automatic payments. "It's important to have a consistent record of not being late," Schaffer says.
  6. Be a watchdog. Every month, review your credit card statements to make sure there is no unauthorized activity. And every year, request a free copy of your credit report and check it for mistakes. "This allows you to see what's making your score dip," says Schaffer. "Once you know, proactively try to address that."

Jim Schaffer and Lincoln Financial Advisors Corp are not an affiliate of any company of the Principal Financial Group.

While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that none of the member companies of The Principal or its representatives are rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.

Insurance products and plan administrative services are provided by Principal Life Insurance Company. Securities are offered through Princor Financial Services Corporation, 1-800-547-7754, Member SIPC and/or independent broker dealers. Securities sold by a Princor® Registered Representative are offered through Princor. Princor and Principal Life are members of the Principal Financial Group® (The Principal®), Des Moines, IA 50392. Certain investment options may not be available in all states or U.S. commonwealths.

t13012803q0 01/2013

Plan Ahead. Get Ahead.

Have a question? Call us at 1.800.986.3343

Copyright © , Principal Financial Services, Inc.
Disclosures and Terms of Use | Products and Services Disclosures | Privacy and Security
Securities offered through Princor Financial Services Corporation, member SIPC