Think you’re too young to worry about your credit history? Think again! Credit history can open doors. One day you’ll need a loan to buy something big like a car or a house. To do this, you’ll need a positive credit history. The earlier you learn good credit habits, the better.
Q: I've had some trouble with credit in the past, but I'm trying to turn over a new leaf. I think I'm doing everything right, but my credit score still isn't rising! What gives?
A: Credit scores can affect you more than you know. Employers look at credit scores. Landlords look at credit scores. Bill providers look at credit scores, and they might decide to charge you if yours gets too low. With all this pressure, you've no doubt started working on some good habits for improving your credit score. You pay your bills on time, are sure to not max out your credit line and work hard not to default on a loan. You might be surprised to find out that some actions you take to improve your credit score are actually hurting it.
If your credit score isn't where you want it to be, it might be due to one of these habits. Read on for four good ideas that might actually be hurting your credit score:
When I left for college I’d never had a credit card before, but I opened one to build credit and pay for books. I transferred my bank account to a local credit union (in the days before online banking), and while I’d always had a part-time job, I’d never really had much financial responsibility. Fast forward three years to my junior year of college when I was paying rent and utilities, buying groceries, making a car payment, and had student loan repayment in my near future. It was a big adjustment. Fortunately I figured out how to budget my money (more or less), and had parents who helped me make smart decisions. But that’s not to say I didn’t make a few mistakes along the way.
As the summer begins, you may be considering how you’re getting in shape for that beach bod you promised yourself a few months ago. As your credit union, we’d like to encourage you to make one of those changes a dedication to financial security and success. Don’t just resolve to become physically fit this summer; become financially fit, too.
Have you checked your credit report lately? If you have, good for you. If you haven’t, you should. Today. Right now. Just go to annualcreditreport.com. It’s free! And if you need help understanding your report, you can contact Accel, Catholic Federal's financial counseling partner. They’ll explain your report and how to fix it, for free.
It’s an important document. Your credit report contains a history of how you’ve handled the money you’ve borrowed, either through loans or credit cards. You’re also assigned a credit score - a number between 300-850 - that reflects how well you’ve handled the money you’ve borrowed. The more responsible you’ve been, the better your score.