As you enter the late teen years, you might be thinking about your future purchases with a different mindset. You might be wondering how you can achieve a strong credit score so that you can someday buy a house, get a new car, or have the best interest rates on the credit cards you get. No matter how you look at it, having a strong credit score will benefit you in the future.
How to Build Credit
There’s a good chance that you might be starting with no credit. Most teens don’t have any credit history, but you have to start somewhere. One way to begin establishing credit at a young age is to have one of your parents make you an authorized user on one of their credit cards. This can build your credit up quickly. However, make sure the person has a long history of on-time payments. Each credit card has a minimum age requirement, so check with the specific card for more details.
Managing Credit Cards
When you turn 18 years old, you are eligible to apply for a credit card. This is a big step for many teens and marks the beginning of your effort to build your own credit. Keep in mind when you open your own credit card, you will have to be responsible for managing them. This requires making all your payments on time. Don’t take on more than you can handle and set reminders in your phone, so you’re never late for a bill. Or you could set up autopay.
Balancing Your Credit Utilization Ratio
Your credit utilization ratio is the difference between how much money you have access to versus how much of it you have charged. For example, if you get a credit card for $2,000 and use $1,000 of it, your credit utilization ratio is 50 %. You’re using half of what you have access to. Most lenders like to see a credit utilization ratio below 30 %. Also, a high ratio can impact your overall credit score. Of course, the more credit cards you have, the more credit you’ll have available, which can drive down your ratio.
What to Do If You Have Negative Things on Your Credit Report
Over time, something negative might end up on your credit report. You may not even be aware of it unless you check your report regularly. When this occurs, it’s crucial to have it dealt with right away. You shouldn’t ignore negative items on your credit report, and you should always stay on top of what types of things are on the report. There are plenty of clerical errors, identity fraud, and so on that can negatively affect your credit score. Getting this taken care of right away is essential so that you can maintain a positive credit score. Remember, when you’re younger, you’re starting from the ground up, so every negative hit will impact you much harder than when you have a long excellent history.
So, what can you do? It can be difficult to keep up with checking on your report all the time. Then, if there is something negative, it can be a hassle trying to get it erased. That’s why it’s best to have a credit repair firm, such as Credit Diva of Dallas, handle it for you.
At Credit Diva, we check your report regularly and work aggressively to remove all negative items from your report. Get in touch with us today for more information.