The Fundamental Habits of People Who Have Good Credit

Nicolas Cesare  | 

Do you know anyone who just seems to get money? This person can do no wrong when it comes to managing debt, credit cards, and mortgage payments and somehow, at the end of the day, they always have enough for a night on the town. This is the person that we all want to be in our financial lives, but actually attaining this status is elusive for many of us.

So what does that money savvy friend do that you don’t? Here are some of the fundamental habits of people who are good with money and, consequently, have awesome credit.

They Pay Off Credit Cards Every Month

Credit cards literally make economies go ‘round. They make purchasing more convenient than ever, and you can use them to buy things that you need with money that you know you will have by the end of the month.

However, credit cards make things so easy that sometimes we can abuse them without realizing it. People with good credit manage their credit card use carefully, only spending money that they know they can pay off at the end of the month and paying their bills on time. This is the perfect way to use a credit card because it shows credit agencies that you can handle debt responsibly — causing them to raise your credit score — and lets you make purchases more freely.

They Stay Healthy

Living a healthy lifestyle is always a good idea, but not many people think of it as a way to save money. Here’s something that will change your mind: 59 percent of people who have been contacted by a debt collector were contacted because of medical debt. The cost of being unhealthy can be severe and land you in serious debt, damaging your credit in the long term.

Try to eat healthy, work on getting about 30 minutes of physical activity a day, and stop believing health myths that a dragging you down. Spending less time at the doctor is a great sign for your physical health and for your financial health.

Take Out Loans When You Need To

Debt isn’t always a bad thing. In fact, sometimes having some debt is good for your financial health. So, contrary to popular belief, it’s not always best to only spend money that you have on hand. Instead, taking on healthy debt enables us to buy things like houses or go to school. Mortgages and student loans can be great things that improve our quality of life and make the modern lifestyle possible. However, they only remain healthy when they aren’t abused.

People with good credit will take on debt, but they will take on debt that is within their means. These people usually have a budget that helps them figure out how many loans they can take out at one time. A history of healthy debt will improve your credit score, making it easier for you to get good deals on loans in the future.

They Make a Budget and Stick to It

If you have a money savvy friend, you might sometimes hear them say things like “I’d love to go out, but I’ve reached my budget for bars this month.” This isn’t your friend being a buzzkill, this is them setting restrictions for themselves and sticking to them.

A good budget will dole out enough money each month for you to keep up a good lifestyle while paying off your debts and saving a little for retirement. Of course, one of the hardest parts about having a budget is resisting the temptation to go over it. Cultivating a budgeting mindset is just as important as crunching the numbers for your budget.

They Have a Long-Term Plan

Budgeting from month to month isn’t the only thing that money savvy people do. They also have long-term plans for their money. Long-term financial planning is important because economic conditions can change a great deal over time. The sort of financial difficulties that you faced in your 20s won’t be the same as they are now and as we age we have to figure out things like saving for retirement.

Having a long-term financial plan in place means thinking about rainy day funds, future children, where you want to live, and how your career will change. This sort of planning can never be 100 percent on the mark, but having a rough idea about your financial future and updating it regularly will save you from a financial crisis that could destroy your credit score.

We all want to be that person who has it all together. While there is no surefire way to avoid hardship in life, anyone can adopt the fundamental habits of people with good financial health. By cultivating these habits you can improve your credit, making things like getting a mortgage or saving for retirement easier in the future.

Need more help with credit cards? Visit our credit card learning center.


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Nick Cesare is a writer from Boise, ID. In his free time he enjoys rock climbing and making avocado toast.

This post was updated December 12, 2017. It was originally published August 9, 2017.