Great Advice for Grads 2020

Baby Steps Can Get Your Credit Life Rolling


You may have been avoiding the world of credit because you don’t want one more thing to worry about. But it doesn’t have to be complicated. Taking these baby steps can help you build a good credit score.


You may be surprised to know you already have a credit score or that you have items listed on your credit reports, like student loans or an auto loan. CHECK YOUR SCORE: Many apps, websites and banks offer free credit scores. A credit score is a three-digit number based on how you’ve handled borrowed money in the past. Where you fall on the basic 300-850 scoring range will determine how easily you can get credit. CHECK YOUR CREDIT REPORTS: These data files hold your track record with borrowed money, and they’re used to calculate your score. Three major credit bureaus gather that data, Equifax, Experian and TransUnion. You can request one free annual credit report from each, says Christine Centeno, a certified financial planner at Simplicity Wealth Management near Richmond, Virginia.


Once you know where you stand, look for a card or loan that’s easier to qualify for when you’re new to credit. SECURED CREDIT CARD: Secured credit cards require an upfront security deposit, typically a few hundred dollars. The deposit also acts as your credit limit. You don’t need to charge much to the card; use it to show responsible credit behavior by paying on time and in full each month. “Start paying one-time and recurring bills with your newly obtained secured card — think Netflix or a cup of coffee,” Centeno says. Making small charges on the card ensures you do not use up a lot of your available credit. A big part of your credit score is based on how much of your credit limit you use on any card; experts say to use less than 30%, and less is even better. (continued)


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