Building Credit 101

In order to purchase most of the larger things in life such as a house or a car, you need to have a good credit score in order to be approved for the loan to buy it. If you are a recent grad or a young professional, you may not have had any opportunity to build up credit thus far, now is the time to start. You might not think it matters that much but it does. Whether you are trying to qualify for a mortgage, auto loans even apartments, to some extent it will be dependent on your credit history.

Building a Credit History

Your credit history is one of the key factors that decides your credit score. The best time to build a credit history is when you are young. The point of a credit score is to show banker and lenders that you can handle your expenses each month and that you pay on time. Now is a good time to think about getting a credit card as well so you can start to build up your credit score as well but make sure you are paying it off every month and not building up interest.

Student Loans

Many people these days graduate with some amount of student loans. While you may be worried about lenders seeing your high amount of debt, do not be worried if you are handling your finances correctly. Be sure that you are managing your debt obligations and repaying them on time, every time.

Be Responsible

Credit card companies often offer cards with high spending limits. Do not take advantage of those if it is outside your means. It is crucial to ensure you are still living within your means with a credit card. Pay off your balances in full and on time every month.

There a large amount of different credit card options out there, make sure to choose the best one for you. Good luck building your credit score!