Recent Grad? Build Your Credit.
As a recent graduate, you probably have not paid too much attention to your credit until this point. Now, you are quickly learning just how important credit is – especially if you are planning to buy a house and move sometime in the near future or open your own small business. Whatever the case is, you will soon understand just what a deciding factor your credit can be.
Understand the Importance of Good Credit
The credit you build now will prove to be very valuable in the near and distant future. You might be saying that you are young, so you have plenty of time to worry about credit. Well, you might be young, but time flies! Pretty soon you will be thinking about purchasing a house, and you will either be grateful you look good on paper or you will be wishing you would have taken steps to start strengthening your credit years ago.
Start with Retail Cards
One of the most frustrating things about credit building is that no one wants to take a chance lending to someone without credit, but you can’t get credit until someone extends some to you. Retailers are usually the most lenient and likely to give you a card.
Do not go overboard and get a number of cards only to max them all out. Apply to a couple of your favorites. If possible, charge something monthly and pay it off every time the bill arrives. As a rule, try not to use more than 30% of the available credit.
Get a Jump Start on Student Loans
Those student loans are going to be on your credit report for a very long time. You might as well start making payments, if you can. Even if you have filed for an extension and don’t have a payment due it does not hurt to pay a little something on them. It should also be noted that although lenders look at debt-to-income, they do tend to be more lenient when the debt is derived from a student loan compared to credit cards and car loans.
The importance of building your credit and staying on track cannot be stressed enough. Ignoring problem areas and waiting for issues to fall off should never be a consideration. Apply these tips to build credit and continue to do that to maintain your credit score.