Your credit is your financial “reputation”.
Your credit score becomes an increasingly critical measure of your financial health as you go through life. From trying to get a car to buying a home, your credit score will be checked to determine if you are eligible for the purchase and what interest rate you will receive.
Even if you’re not currently looking to buy, landlords check your credit score when you’re applying for an apartment lease. In some states, employers frequently run credit checks on prospective employees, especially those who would handle money.
You can’t achieve a great credit score overnight. You have to show that you can responsibly handle borrowed money over time. It’s important, therefore, to start building credit early so that you can put your best financial foot forward when it matters most.
|Helps Your Credit Rating||Hurts Your Credit Rating|
|Paying bills on time||Missing or late payments|
|Making monthly payments in full||Not making the minimum monthly payments|
|Checking your credit report and score for accuracy||Applying for numerous credit cards|
|Keeping account balance below 30% of limit||Exceeding account limits|
|Taking out a loan for a major purchase||Defaulting on a loan|
|Ask for a credit increase||Closing older credit card accounts|
|Consolidating all credit card debt under a personal installment loan||Having an account sent to collections|
|Asking the collector to erase the account from your credit file when you pay it off||Filing for Bankruptcy|