Good Credit: Just A Matter of Habit

Good credit can help students to build up their credit score. This can greatly affect their future chances of obtaining a mortgage or loan for personal or business purposes. When students finish college they usually have a bit of time before their first pay check arrives, the ability to take out a personal loan could tide them over and help them with relocation and new job start-up costs.

Lenders often take a person’s credit score into account when offering further credit so it is important that students consider how to build up a good profile.

There are actions which could negatively impact a person’s credit score these include; late payment, defaulting on payments, having an account charged off, account being sent to collections, missing payments, high credit balances or maxed out cards, bankruptcy and receiving a court judgement.

Maintaining a good credit score is reliant on behaving responsibly with your cash. It involves showing lenders that you are capable of dealing with money issues such as paying on time, not spending more than you can afford and not missing payments.

To build up a good credit score you first need to be accepted for credit, this can be difficult for people below the age of 21 unless they can show proof of an independent income. Many people choose to become an authorized user on their parent’s account; if the parent has a good credit rating this can also boost their child’s rating when they are associated on the same account, this is known as piggybacking. This can be the fastest way to do it.

If you are in a position of getting your own card then it is wise to shop around; getting a card with low interest, no annual fees and introductory perks. It can sometimes be easier to get a retail card, though interest rates can be higher, it can enable the user to build up a credit rating- allowing a foot on the ladder to show your responsible spending and paying habits.

Once you have your card it is best to make smaller purchases and pay them off regularly, if possible clearing your balance each month. Pay all your bills on time and make sure not to miss payments.

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