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Growing up in a poverty struck neighborhood, listening to my grandparents say “,credit cards are bad,” and getting a job at the early age of 13, I never though that having credit history would be important. It’s an easy misconception in many households around the United States that having good credit is not important, that as long as you are paying your bills on time, everything will be okay. But the truth is, many of the major moves we look forward to are based on our credit history and our credit score.
We all look forward to owning our own business and home, purchasing the car of our dreams, flying to different countries, and visiting all the wonders of the world. As much as we dream, we also have to prepare. The strength of your credit will determine if you can rent that apartment with the balcony and pool you have been eyeing down. The strength of your credit will determine how high or low your monthly payments will be for that car you have been drooling over. The strength of your credit will determine the amount of money you can receive for a loan to open your own business. But the most important thing I want to share with you is, it is so EASY to get that perfect credit score that will allow you the opportunity to do all of these things you dream of.
I honestly did not know where to start when I finally realized how important it was to start building my credit so that I could own a home, vehicle, and business of my own one day. So I did what anyone else would do, I asked friends and family members who did that those things. After still thinking about it and not making any moves, I finally created an account on http://www.CreditKarma.Com .Creating an account with CreditKarma was the best thing I could have done. Not only is the account free, but it showed me how my credit file looked at the time I started, gave me suggestions on which credit cards I should apply for, and I get emails every month or so showing me how my credit score has changed AND ways that I can continue making my score higher.
You don’t need Mom or Dad, or someone to co-sign things for you. All you have to do is apply yourself and do some research to succeed. In this case, I did the research for you. I applied to a secure card with Capital One. I had to pay $99 for a $200 credit limit. You may say $200, what the heck can I do with $200? That is besides the point. This credit card game is not for you to get things you otherwise could not have afforded. This credit card game is for you to show that you can be granted the credit and NOT use it irresponsibly. I learned that in order to have an excellent credit score you should use no more than 9% of your credit limit. So, each month I would only use $18 on my credit card and then pay it off two days before the actual due date. NEVER make a late payment. By doing this for a few months, I was approved for an increase to a $500 credit limit without having to even apply for a different credit card. I am now only a few months in and my credit score is GOOD and on its way to EXCELLENT.
Here are my tips to stress free credit building:
1.Start with CreditKarma and evaluate where you stand.
2.Apply only for 1 Credit Card (each time you apply for a credit card your credit score is ran and your score drops)
3.Once you obtain a credit card ONLY USE 9% or less than your credit limit.
4.Call your credit card company every two weeks to check your balance and make sure you have not received any fraudulent charges. (Calling your credit card company will remind you of the DUE DATE for your credit card bill.)
5.ALWAYS pay your credit card bill on time! Do NOT wait until the actual due date to make a payment because life happens unexpectedly and something might come up. If your credit card bill is due on the 28th of every month, you should call by the 24th and make your payment. NEVER wait to the last day.
6.Make it a priority to pay the ENTIRE balance and not just the minimum. This shows responsibility and good spending habits.
7.DO NOT apply for other credit cards until you are SURE about your SELF-CONTROL. Wait at least 6 months before running your credit for another credit card.
8.Remember credit is a TOOL, not a lifeline. You use credit as a report card to show you can handle having it but that you won’t ABUSE it.
I hope you enjoyed reading this article. I have many more to come. Feel free to leave any comments or advice for first time credit builders below.
P.s I do not work for CreditKarma, I am simply a fan of how it taught me how to build my credit and am happy with the results I have received by using their tools.
Written with Love, BY : Loraine “Lorri Love” Donayre
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