Monday, April 18, 2005

Good Credit for a Good Future

After receiving my credit score from, I became inspired to write a blog about credit. It is so important to establish good credit from the time one turns eighteen. I was fortunate: my father taught me about responsible finances and the benefits and downfalls of credit while I was young, but not everyone is as fortunate. Simply letting a bank account go overdrawn is enough to damage credit. It is really easy to ruin one’s credit, so I’m going to offer some tips on how to maintain good credit. First, pay off the entire balance of your credit card as soon as you can. If you charge twenty dollars, pay it off that month. If you cannot pay the entire balance you charge (for example, if you have to fix your car), then pay more than the minimum monthly payment. Secondly, do not let your bank accounts go overdrawn. That is financial suicide. Monitor your banking to prevent this from happening. Most banks offer online banking for little or no charge. Third of all, only take out one or two credit cards, and no more. That way, you can build credit without allowing yourself to go overboard. And last of all, if you must buy a car, put a large cash down payment. That helps your credit tremendously, and will help you get a lower APR, which will let you pay of your car more easily. Owning a car helps build your credit because it is non-revolving credit, as opposed to credit cards, which are revolving. Credit can influence what kind of house you own in the future, what kind of car, what neighborhood you live in, and the overall quality of life you life. Don’t mess it up because you’re young and uneducated. Learn about credit, and how to keep yours respectable.


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