How to Start Building Credit History
By Guest Blogger: Alex Saplala
If you’re a recent graduate looking to start building your credit history, have no fear. Follow these simple tips to start your financial life on the right foot.
Start With One Credit Card
Don’t open too many credit cards right off the bat. Not only will it be difficult to keep track of all your expenses and dues, having more credit might encourage you to spend more. Too many new cards opened in a short time span can actually negatively affect your score.
Make All Your Payments in Full
No matter how large or small the expense is, make sure all of your payments are made on time and in full. Paying off your entire balance each month shows you’re capable of effectively managing your finances.
Let Your Accounts Age
When you’re ready to open new accounts, don’t be in a rush to close your old ones. The longer your credit history, the better it is for your credit score. Credit bureaus will automatically drop closed accounts from your report after several years but, in the meantime, they can help boost your score.
Pay Off Student Loans
While your student loans might prevent you from making large purchases anytime soon, they can actually help you build credit. Regularly paying your student loans on time will improve your score the same way paying off any other loan or credit charges would.
Give It Time
A good credit score doesn’t appear overnight. While it can take a year or two to build an average or good score, reaching the 700 or 800 level could take up to seven years. With a long financial future ahead of you it’s important to start small and focus on managing your current credit.