07/23/2021
Good credit is always a plus, especially when you're starting your adult life. At that time when you may need a new job, a car loan, car insurance, an apartment, and a credit card - having a positive credit history and a good credit score can open doors. So, if you're thinking about venturing into the world of credit, beware of these common mistakes you'll want to avoid.
1. Waiting to build and establish credit - No one comes into the world with good credit. Until you begin using credit, you won't have a credit report or score. For most, establishing credit means starting small with a low line of credit that may require a security deposit. And if you think about it, that's not a bad place for a young person to start. You get a card to use for emergencies or to cover expenses without too much risk of running up a giant balance.
2. Using credit cards irresponsibly - You can build a positive credit history and grow your credit score with a secured card or student card, but only if you maintain good credit habits. Before you open credit card accounts and begin using your cards, learn about the factors that go into building a good credit score.
3. Losing track of and not paying bills - Late payments can be costly to your credit and otherwise. One payment made over 30 days late will ding your credit score, and accounts that end up in collections for nonpayment will damage your credit further. Even if you make a credit card payment before it's 30 days late, your card issuer may charge you a late fee and increase your interest rate as a penalty.
4. Not checking your credit regularly - If you're doing a good job of managing your credit, you'll see your progress on your credit report, and tracking your rising credit score can be motivating. Monitor your report regularly, and you'll also get an intuitive sense of how your actions affect your credit.
