5 Steps to declare your financial independence


— This Fourth of July, let freedom ring. Financial freedom, that is. Whatever your vision is of financial independence, having strong credit is fundamental, potentially impacting borrowing, and even routine matters, such as having utilities connected, getting a cell phone or even applying for a job.

The experts at Wells Fargo are offering five ways you can take control of your credit:

1. Monitor credit reports.

Review your credit reports at least once a year with all three national credit bureaus: Equifax, Experian and TransUnion. Reviewing your credit reports may help you catch errors or fraud and correct them before they could impact your credit history. Some banks, like Wells Fargo, provide eligible customers free access to your FICO Score through mobile apps.

2. Pay bills on time.

Your payment history makes up approximately 35 percent of your credit score, so making timely payments is important. One way to stay on top of your bills is to prioritize and schedule monthly payments, and to pay at least the minimum balance every month on all your accounts.

3. Keep track of your credit balances.

Always try to stay on top of how much you’ve borrowed against your credit and make sure to stay within your budget and credit limits. One way to manage your balances is to use online banking to view your monthly statements.

4. Manage your debt-to-income ratio.

Lenders use your debt-to-income (DTI) ratio to assess your ability to pay back any new debt. By keeping your payments much lower than your income, it can help ensure a lower DTI ratio, which can make it easier for you to qualify for new credit.

5. Avoid maxing out credit accounts.

Don’t exceed or max out your credit line. It can reflect negatively on your credit report. Most lenders offer different types of alerts (such as email and mobile) and other services to remember upcoming payments.

For more credit tips and free resources, visit www.WellsFargo.com. As you celebrate our nation’s independence, think about small steps you can take to declare your own financial independence.