Welcome back to Forever Young and Married Blog. Today I want to share with you guys about the things people don’t tell you about building your credit as a young person.
Today I will discuss with you guys about the do’s and don’ts on building your credit. Credit cards are such a hush hush topic and many young people get caught up in credit card debt because people tell them credit cards are bad. I am not here to tell you that I am here to explain to you how credit cards work in the real world.
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Okay lets get started!!
Nobody never really talks about how to build your credit and everybody talks about how not to get into credit cards debts. Credit cards are not always bad for you. It is based on the person mature level when it comes to using credit cards. Many older people tell you to only pay cash for everything that you want. It is almost a golden rule if you don’t have the cash to pay for it then do not buy it. While that information definitely has some truth behind when it comes to purchasing item.
Nobody tells you the good behind credit cards and how to build your credit. When you get older your credit is all you have to get you car, house, or personal loan. Even to get apartment they take a glance at your credit depending on the apartments. I was lucky enough to get a student discover card with $500 limit that my dad only let me use to get college books with. That credit card definitely built my credit over time. I still learn the hard way at having a credit card.
Now lets get into the ways to build your credit score to get into the 700 or better credit club.
- Get a credit card with a low credit limit. Get a credit card with $200 to $500 credit limit. This is great amount to get you started with building your credit. You can use this card for like gas or groceries and pay the bill in full every month.
- Only use 30% of your credit card limit. On your credit report it is called credit card utilization. It is an important factor on calculating your credit score.
For example: If your credit card limit is 500x.30= 150. If you are going to use your card and carry a balance then make sure it is no more than $150 on $500 credit limit.
- Pay on time. Paying on time is very important. On your credit report they will have a record of your payment history. The information is important when you are trying to get mortgage or car loan. The lenders use this information to decided whether to long to you.
- Monitor your credit score ever couple of month. It is just great to keep an eye on it. Making sure all information is correct and to motivate you on the little progress you have made.
Follow theses small tips will definitely help you build your credit. Remember paying for everything with cash is good. You need good credit history to get a car loan or house mortgage. You need some credit to verify that you can pay and manage your bills on time. The best rule of thumbs is to NEVER charge something that you cannot afford to pay off by next month.