A Guide to Credit Management: Millennial & Gen X Edition

One of the most prevalent financial problems in today’s society is poor credit and lack of educational resources for credit management. Most people don’t realize how important it is to maintain a favorable credit score until it affects their livelihoods in some instance. The most common areas that poor credit will negatively impact an individual or a family is with housing, travel, personal loans, and other rental related area.

Housing, travel, and personal loans are almost an absolute necessity for everybody in today’s society unless there is a special circumstance where one is able to avoid these life stages and get by without having to undergo a credit check. If you are not a special circumstance person then managing your credit on a regular basis will be a process to strongly consider implementing if you haven’t already.

Regardless of your personal and financial situation this guide to managing credit will come in handy for your real life. The following body of this blog post will contain key credit management areas to focus on in your plan. Whether you are trying to establish credit or are in the phase of paying down your credit card bills and loans, key takeaways are present for your financial future.

Understanding Credit Scoring

Before you understand how to properly manage your credit score it is important to learn how the credit bureaus determine one’s credit score and overall report. A credit score is defined by FICO as “A credit score tells lenders about your creditworthiness (how likely you are to pay back a loan based on your credit history). It is calculated using the information in your credit reports. FICO® Scores are the standard for credit scores—used by 90% of top lenders.” 

One’s FICO score is determined by a scoring table with ranges of categories used to determine an individual’s creditworthiness. The numerical scoring scale ranges from less than 580 to 800+ and are separated by the following categories poor, fair, good, very good, exceptional.

FICO Scoring Table
FICO Credit Score Ranges

FICO Score Management Tips:

Start with checking your FICO score through any of the three credit reporting agencies to ensure your information is accurate and error free. If there are any errors on one’s credit report an option to dispute exists. This is important because a sizable portion of credit related issues stem from inaccuracies and unfortunately criminal activity such as fraud and identity theft. Once you have reviewed your credit report and analyzed the data within the report, you are ready to begin implementing positive and simple credit management strategies.

The first management strategy to put in foundations is rules to abide by when opening a credit card, the purpose and advantages along with the negative choices one may make in his or her financial journey. The first strategy is to choose which expense you will incur with your credit card and a solid reasoning as to why you choose that option. The responsible financial decision is to use a credit card for an affordable expense in order to build credit for future loans.

The next step is to establish credit with your plan of action. Set a day of the month that your scheduled payment is coming out of your credit card. This expense should be paid in the full statement balance for approximately 4 months to make enough on-time payments to establish an initial credit score. This process will also beneficially create positive financial habits for you in on time payments and it will familiarize one with the process.

Once the initial learning curve along with positive habits have been put in place, it is time to understand how the amount of available credit you have left plays a part in determining your credit score. Using 30% or less of your available credit and making on time payments will provide for a good credit score. To increase one’s credit score even more, using 10% or less of available credit will provide for the most favorable score.


  • Choose a reasonable and realistic recurring expense to incur on a credit card
  • Establish at least 4 on-time payments and pay full statement balance
  • Using 30% or less of available credit + on-time payments for favorable score 
  • Using 10% or less of available credit + on-time payments for superior score

Source(s): https://www.myfico.com/credit-education/credit-scores

Thanks For Reading,

Michael Moran

Managing Partner @ IHG Management

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