4 Smart Ways to Start Building Your Credit History Early

4 Smart Ways to Start Building Your Credit History Early

Starting to build a credit history early is one of the most intelligent decisions you can make and will save you time and money in the long run. Most people realize that establishing good credit is essential when they start applying for loans or other forms of financial aid for college or houses; very few know what steps they can take today to ensure that their credit history remains strong throughout their lifetime.

1- Start Paying All of Your Bills on Time

The biggest thing you can do to establish good credit starts pay your bills on time. If you have a credit card with a variable interest rate, make sure you pay the minimum amount required by the contract. While it’s always best to pay off your balance as soon as possible, there is no harm in paying only the minimum amount necessary to break even.

2- Apply for a Credit Card as Soon as Possible

Don’t forget to apply for a credit card as soon as you are eligible. Many college students are surprised to learn that they can apply for a credit card while still in school. Depending on your age, your parent may need to sign the application, while others can apply independently. Few people know that a parent can sign a co-signer’s application, giving the applicant a better chance of getting approved for loans.

3- Pay Off Your Credit Cards in Full Each Month

While it is important to pay at least the minimum amount you owe each month on your credit cards, you should pay them in full before the bill’s due date. Doing this will help establish good credit for life and give you an incentive to pay off your monthly balance.

4- Check Your Credit Report and Score

While it’s easy to get into the habit of paying all your bills on time and paying off your debt, checking your credit report and score every week is the best way to keep good credit. Doing this will let you know how you compare with others and what steps you can take to improve your score.

Rules to Follow When Applying for a Credit Card

Always apply for a credit card before you are approved. Since banks can see your score, you shouldn’t make the same mistakes twice by applying for a card and not being approved. It will also show on your report if you consistently apply this way or not.

Always be on time when applying for a credit card. If you’re not the person who is registered to the account, make sure you have the authorization to apply for a credit card.

Always know the limits of your card. Before applying for a credit card, it would be best to ensure you can keep up with your payments. Look over how much you spend and make before applying for a credit card because your score will also suffer if you don’t know what debts are yours.

Always ensure your bank has the card number and emergency contact information written down in case you lose your card. If you don’t have such information written down, write it on paper and keep it safe.

Make sure you’re always on time with your payments. It is essential to have good credit because if you don’t have good enough credit, banks won’t give out new loans or loans in the future. After all, they will believe that you can’t pay them back.

It’s helpful to begin building a credit history as soon as you are old enough to have a credit card. This will give you the best chance of qualifying for a car loan when you need it and help you with any other applications that require good credit. The sooner you start, the better your score will be, and the more options you’ll have when it comes time to apply for financial aid.