Adulting 101: Building Your Credit Score

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So, let’s talk about credit.

 

Question…when was the last time you checked your credit score? Or maybe a better one is, have you ever looked at your credit score?

 

Credit scores are one of the many important topics that young adults are expected to have figured out without it ever being taught to us. A credit score is a numerical expression based on a level analysis by credit bureaus of a person's credit files.

 

This score is used to determine the creditworthiness of an individual. In other words, a three-digit number affects your ability to do basic adult things such as buying or renting a house, apartment, car and so much more.

 

If any of those things aren't important to you now as a college student, they definitely will be very soon after you graduate. Don’t fear though, there are many ways to get your credit score in check.

 

In order to build your score, I first suggest checking your score to have an idea of what you’re working with. A great website to use is CreditKarma; this site gives you your score for free, they even have an app you can download which makes it super convenient.

 

If you haven’t started building your credit, it is very likely that your score is a bit low, in the 600 range. This is due to the fact that you have no credit history. Having no credit history isn’t as bad as having bad credit, however, you are likely to receive the same responses from creditors as someone that has bad credit history because they have no way of confirming your creditworthiness. 

 

Here are a few quick tips on how to build credit:

1. Start off with a secured credit card – Use this card for necessities only! Never use it to buy things you wouldn't usually buy and only spend what you can pay back…because you have to pay it back.

2. Make your payments on time – Any payment you owe, not just your credit cards. Pay them back in full and on time.

3. Keep your accounts open as long as you can – No, it doesn't have to be as big as a mortgage. It can be as small as a basic credit card but keeping that account open for as long as possible and keeping up with the payment shows creditors you are responsible enough to make your payments on time thus increasing creditworthiness and credit score.