If you're young and debt free, you're lucky! Many people we speak to have come to the end of their rope financially. But even though you have no marks on your credit history, doesn't mean you're ready to buy a car or a home and expect a low interest rate. First, you need to prove that you can be financially responsible by building your credit. Here are a few steps from CNNMoney to building a solid credit score:
- Know Your Current Credit Score:
You can request a credit report from each of the three major credit rating bureaus. There are several online resources that give you free credit reports.
- Open a Bank Account:
Having a bank account shows stability and tells lenders that you have a stable income. A savings account is also great to show financial responsibility.
- Pay Bills On Time:
Any late payments can be reported to credit bureaus and take points off your score. Be sure to never miss a payment.
- Get a Credit Card:
Having a credit card shows that you can responsibly borrow money. To avoid paying high interest rates however, only borrow what you can pay off at the end of the month. Think of your credit card as a debit card. You don't want to overdraft your debit card, just like you don't want to owe more than you have at the end of the month.
- Get a Small Loan:
After you've built your credit for about a year, you're ready to take out a small loan for a car or for school loans. Just make sure you pay the necessary amount regularly.
If you'd like more advice on building your credit, contact CBI Education Network. We exist to help you increase your credit score. To find out about upcoming events or to gain more information on building your credit, visit our website or call us at (888) 690-1750.