How To Build Good Credit
As you transition from college to the real world, your credit score will become more and more important, especially as you get ready to set up bills and make big purchases like cars and a home. But building credit doesn’t have to be difficult or painful.
Pay Your Bills On Time
This may seem obvious, but your credit will take a ding if you don’t pay bills like power, phone, car, and student loans on time. Budget accordingly so you have enough after every paycheck. Set up automatic bill payments through your checking account so you don’t miss any payments.
Use Credit Cards Wisely
It’s very tempting to use your credit cards when you want something, but don’t let your credit usage get out of hand. Balances can buildup quickly and that could lead to a late payment, which you really don’t want. Limit the number of cards you have and make sure you pay on time and pay off balances. Making regular payments and keeping balances low will help you build your credit smartly.
Start Small And Build
Your credit union may have a better rate for your credit card, so start there, or get a secured card – where you make a deposit and it becomes your credit line. Get a lower credit limit so you’re not tempted to over-borrow. When you get into a habit of paying on time, you can build your limit to match your earnings and needs.
Be smart with your credit and it will build with you. Make sure to get your annual free credit report to track your progress.