There are many important numbers in your financial life, from the digits on your paycheck to the amount left over after all the monthly bills have been paid. Even so, no number is quite as important as your three-digit credit score, and keeping that number as high as possible will make everything from getting a loan to landing a job easier.
If you are just getting started in life, you may not have much of a credit score to speak of, and banks and lenders are unlikely to trust the clean financial slate you are presenting. That is why it is so important to build your credit profile as soon as you can, even if you have no loan or mortgage plans in your immediate future.
Building a solid credit score may seem like a mysterious process, but it is actually simpler than you might think. All it takes to start building your credit is some sound financial planning, starting with paying your bills promptly and in full.
With every on-time payment you submit to your credit card issuer, electricity provider, or other organization, you begin building that all-important credit score. If you need help getting started, you can simply set reminders for when each bill is due, reducing the danger that you will miss a payment and ding your credit before you finish building it.
Jump Start Your Credit with a Small Loan
If you need additional help with your credit score or a way to build your credit more quickly, you can take out a small loan, using the on-time payments you make each month to boost your credit score and build your credit profile quickly.
There is obviously a cost to this approach to building credit, and you will need to decide for yourself if the sped-up timeline will be worth the extra money. If you do not need the cash, you might want to put the loan plans on hold for now while you work on building your score by paying the bills you already have every month.
Make Sure Your Rent Payments Count
Another way to boost your credit score more quickly is to talk to your landlord, or to the property manager responsible for the apartment complex where you live. Not all landlords report on-time rent payments to the credit reporting agencies, so you may need to ask your landlord to submit these reports on your behalf.
Monitor Your Progress
You can monitor how you are doing by keeping a close eye on your credit score each month. If you are doing everything the right way, you should see a slow but steady rise in your three-digit credit score. If your score goes down unexpectedly, you can review your credit report for additional information. If there is an error on your report, you can ask the agency to investigate and remove the mistake if applicable.
It is easy to find out what your credit score is, and in most cases it is totally free. You should not have to pay for access to your score, not when many credit card companies and free monitoring services already provide it.
To build credit is a rite of passage for your financial life, and the sooner you get started with it the better off you will be. The tips listed above can help you improve your credit score over time, so you can get your financial life off to the best possible start.
