The Four ‘P’s of Spending for Good Credit - Refresh Financial

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The Four ‘P’s of Spending for Good Credit

Spending for good credit

When it comes to spending habits that result in a great credit score, there’s no better way than to remember the four ‘P’s: Percentage, Patience, Points & Punctuality.


Maxing out your credit cards isn’t going to help your credit rating, but that’s a no brainer. What most people don’t realize, is that the percentage of the credit you have that is being used, directly affects your credit score. You also might not realize that using none of the credit you have, is also not a good idea.

If you have $10,000 in credit across all your cards, loans, lines of credit and so on, and you carry a balance of $5000, you’re using 50% of the credit you have to your name. Your usage percentage is 50%. This is a little bit high. While the percentage that will benefit your credit score the most tends to vary from person to person, it is generally a good rule of thumb to keep your usage to under 30% and above 0%.

Why isn’t it good if you don’t use any of your credit? Well, it won’t harm your credit, but it certainly won’t increase it either. You need to use your credit so that the credit bureaus and future lenders can see what your habits are with your credit. If you don’t use it, how do they know if you pay borrowed funds back in a timely manner?

Key takeaway: Use your credit, but not too much. Try to keep your usage to below 30%.


This is that piece of advice we all know; we’ve all heard before. It’s the first thing any credit counsellor is going to tell you, and the first thing that pops into your head when your financial situation suffers: spend in moderation and live within your means.

Credit is not to be viewed as extra money or added resources. Credit should be looked at like early access to your future money. What you use today, won’t be available tomorrow. You should only spend what you can afford to pay back… without sacrificing your ability to save.

The best way to keep yourself disciplined is to budget your money. Look at your accounts often and always keep on top of what you have: what’s coming in and what’s going out. Get yourself an app that keeps your money on your mind and helps you set and reach goals. Talk about your money with your spouse or partner. Keep it on the surface, out in the open and in your face. The more often you see your money and what’s going on with it, the easier it is to say no to that new ATV you’ve been thinking about getting.

Key Takeaway: Don’t make future you suffer for present you’s spending sprees.


Make sure your credit cards are the sort that offer rewards. Try to find one that offers rewards at the store you shop at the most. If you do all your grocery shopping at Real Canadian Superstore, like I do, then the PC Mastercard might be the best credit card for you. You’d be surprised, when you’re actively using your credit often (but too much!) how fast those PC points add up. Those points equal free groceries. Free. Groceries. Collect your points. Count your points. Watch your points grow and then use them wisely. Perhaps save them all for Christmas time when all of our wallets take a hit. Instead of taking that hit, smart people like you are going to fund their holidays with PC points. Good job!

Key takeaway: Become a points hoarder.


Always pay your bills on time. I know you know this. You know you know this, but it’s not enough to just acknowledge this as the case. Despite the fact that we know this, we still forget a bill now and again, or something slips our mind and a couple months later our credit score is suffering. Don’t just say I know and skip this point. Make some changes. Set up automatic payments on all of your bills. Use that amazing piece of tech in the palm of your hands to remind you when the money is coming out of your bank account. As I said in the second ‘p’, budget and use an app like Mint to keep you on the ball. Don’t leave room for costly mistakes. Don’t accept the fact that you are human and you err. There is no excuse in this age of tech, for you to miss or be late on a single, solitary payment. Not even your library fines. Just trudge your ashamed butt on down to nerdtopia, look that librarian in the eye and say, “I’m here to pay my overdue fines because I am a fiscally responsible adult.”

Key takeaway: Don’t rely on your fallible brain to remember to pay your bills on time. Let the computers do it for you!

If you follow these four ‘P’s, your credit score is going to be something that makes you smile in the future. Commit to it, and be proud of yourself.

Are there any spending habits you rely on for a good credit rating? Let us know in the comments!

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