How to be smart using credit

Taking steps to improve your financial skills includes understanding how to manage credit before you ever open any credit account. If you don’t take credit seriously, you may run into issues when applying for a mortgage, car loan, or funding for education through a loan. National Get Smart About Credit Day occurs each year on the third Thursday in October and is a holiday to help you take control of your credit and secure your financial future. 
Using credit responsibly is one to support your financial security and make the most of your income. Here are a few tips to keep in mind:
Review your credit report annually: Review your credit report for a complete view of your debt and lines of credit and check for errors. Reviewing your information will help you gain confidence by allowing you to stay on top of any changes.
Set up a budget and live within it: Credit should not be used to purchase items you cannot afford; it is a tool to show lenders that you are trustworthy in paying them back. By setting a budget and living within it, you will avoid using credit to overextend yourself.
Pay your bills on time: Late payments impact your credit score negatively and affect your ability to open new lines of credit since your trustworthiness is in question. Paying your bills on time is extremely important.
Use caution when closing accounts: Closing an account can increase your overall credit utilization rate. However, it can be helpful if you want to eliminate cards with high-interest rates or annual fees. Make sure you have ample credit available to you before closing an account.
Why consolidating may not be best for your situation
Debt consolidation is the process of combining two or more debts into a single, more considerable debt. Debt-burdened consumers often choose to consolidate, but there are a few things to keep in mind when considering consolidation:
Consolidation is not a solution for solving financial problems and does not guarantee that you won’t go into debt again. If you have a history of living beyond your means, you may do so again in the future. Creating a budget that works for you and committing to it is critical.
There may be up-front costs: Some debt consolidation loans come with loan origination fees, balance transfer fees, annual fees, and closing costs. Make sure you are aware of all fees before consolidating.
You may end up paying a higher interest rate: The new loan could come with a higher APR than you had initially thought.  Ensure to do your research before signing.
Making smart choices when it comes to credit use is critical to your financial future. Work with your financial professional if you need help managing your credit or have questions regarding credit use.