Interested in some tips about how to build good credit? Here are a few to start with that won’t cramp your lifestyle too much and will help you achieve your professional goals by reminding you to be responsible about money.
1 – It’s never too early or too late to start. Whether you’re 21 and first able to get a credit card of your own, or if you’re older and haven’t focused on good credit yet, just get started. Is it better to get started early? Sure… just like any good habit. But no matter what age you are, good credit is usually associated with good financial habits.
2 – Use your card instead of cash. Have some cash on hand if you like and keep the rest in the bank, but don’t use cash and your card or you will likely use up your cash and not have it available for use when you need to pay your credit card bill.
3 – With the exception of a car or house, think carefully before buying anything you can’t afford to pay off within the month. Sure it’s fun to be able to buy something right away when you like it. But if you don’t have the cash available to pay for it with the next paycheck, then often by the time you actually do finish paying for it, you have paid a lot if interest payments which really increased the original price of the item.
4 – Always know approximately how much your credit card is at any given time. Keep a mental note in your head or mark it on a list every time you use your card so you don’t have a big surprise when the bill comes in.
5 – If a store offers a discount for using their card on a certain day, that’s a good day to shop. Often department stores will do this. Don’t buy more than you would have bought without a discount, but if you have a choice to get an additional 15% off by using your store credit card, by all means do.
6 – Pay your cards off monthly. There are some people that say that in order to build up credit you have to pay it off little by little instead of paying it monthly. I have always paid my cards off monthly and I have a credit score in the top 5%. You can ask around on this one but for me it has worked to pay them off right away.
7 – Always use a credit card that offers cash back or other perks and never pay to have a credit card. I used to have a “prestige card” that I paid a yearly fee for. No more! Discover Card is easy to get and was one of the first credit card companies to offer cash back while other companies were still charging their customers to have a credit card. I have been getting cash back for years from Discover (which by the way they are currently offering approval in 60 seconds if you qualify which is kind of cool )and I love having them pay me!