You know how important budgeting is to our financial wellbeing, but how often do you pay attention to your credit health? Don’t wait until you’re wanting to purchase a home or car and you find out your credit score needs work; understand the keys to good credit health and why it’s important to building financial fitness and strengthening your financial future.

The Credit Score

Your credit score is a snapshot of how you've managed credit in the past. While the exact formula varies by scoring model, your payment history, the amount of available credit you're using, the length of your credit history, and the types of credit you manage all play important roles.

Your credit score is more than just a number: Maintaining good credit can save you thousands of dollars over your lifetime through lower interest rates and better borrowing terms. A good score may also help you secure better terms on insurance, apartment rentals, and even some utility deposits.

If you currently have no credit, there are steps you can take to start building a healthy credit history, like getting a secured credit card or becoming an authorized user on a family member’s credit account.

Here are a few expert-backed strategies to keep your credit in good shape:

• Pay every bill on time. Your payment history is the single biggest factor affecting most credit scores. Even one payment that's more than 30 days late can remain on your credit report for years. Setting up automatic payments or calendar reminders can help you stay on track.
• Keep credit balances low. Experts generally recommend using no more than about 30% of your available credit. Keeping it even lower, like under 10%, can be even better for your score. Paying balances in full whenever possible also helps you avoid costly interest charges.
• Think twice before opening new accounts. Every application for new credit can trigger a credit “inquiry” that can cause a temporary dip in your score. Opening several new accounts in a short period can also make lenders view you as a higher-risk borrower. This is especially important if you're planning to apply for a mortgage. Mortgage lenders often review your credit more than once during the approval process. Opening a new credit card, financing furniture or appliances, buying a car, or taking out a personal loan before closing could affect your loan approval or the interest rate you're offered.
• Check your credit reports. Review your credit reports at least once a year for errors or signs of identity theft. Federal law allows you to obtain free reports from each of the three major credit bureaus through AnnualCreditReport.com. If you see something suspicious, contact each of the three bureaus to report the discrepancy and take steps to protect your credit, such as applying a fraud alert or credit “freeze.”

Making a Course Correction?

If you’re experiencing financial hardship and are worried about being able to pay your bills on time, don’t run away from the problem. Reach out to your creditors as soon as possible to see if they’ll work on an arrangement that works for you. Possible options are temporarily lowering your interest rate or monthly payment, deferring (or skipping) a few payments, or making longer-term payment arrangements with a monthly amount you can afford. The key is to communicate early to demonstrate your willingness to pay.

You may also qualify for temporary financial assistance to help you pay your household bills.

Remember, everyone experiences hard times now and then, and your creditors want to keep your relationship healthy as much as you do!

Expert Advice

Your Transocean benefits include resources to help support your financial well-being. Take advantage of Fidelity’s Financial Wellness resources and regular financial seminars. You can also schedule a one-on-one consultation with a Fidelity Advisor for personalized guidance based on your financial goals. See below for an upcoming September scheduling opportunity.

Like physical wellness, financial wellness isn't about perfection, it's about consistency. Paying bills on time, borrowing responsibly, and planning ahead can help you build strong credit and put yourself in a better financial position for whatever lies ahead.