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Building Your Credit Score

I still remember sitting in one of my business courses in High School at the age of 15 being told to avoid credit cards at all costs. Why? Because some people misuse credit cards and swipe it one too many times. Before you know it, you owe your credit cards more than you can afford.


Unfortunately, it is not easy to say no to credit cards, especially because a good credit score is typically required to finance a car, buy a house or make big purchases with low monthly payments.

 

If you don't have a credit card yet but you've been considering one, visit the following link to find the best fit for you: WalletHub. My personal favorite is Discover Student Cash Back! The perks are amazing!

 

Now, the big question is: How do you build good credit?


Let's begin by exploring credit scores. Look at the image below to learn what a good score is.


Something to note is that the two most common credit score models are FICO and Vantage Score.


Now let's dive into what determines your credit score


38% Payment History

32% Amounts Owed

18% Length of Credit History

8% Types of Credit

7% New Credit


With this in mind, to improve your credit score, follow the tips below:

  1. Always pay your bills on time

  2. Pay at least the minimum due

  3. Do NOT use up all your credit. Stick to ONLY using 30% of your credit

  4. If you already have an account open and have had it for several months, a year or two, open another to help your score

  5. Set up automatic payments or put due dates on your calendar. Set reminders!


I hope this helps!


P.S. A higher score can save you money, and it is never too early to begin the process!


Yours truly,


Wendy






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