Now that you know why good credit is so important, it is time to discover how to establish and maintain it. Use the internet to find at least seven (more is better) ways you can establish and maintain good credit. Be sure to note your sources so that you can cite them. Once you have your information create an infographic or an online poster to display your knowledge.
1. Pay your bills on time: One of the most important factors in establishing and maintaining good credit is making sure to pay all of your bills on time. This includes credit card payments, loans, and any other financial obligations you may have. Late payments can have a significant impact on your credit score.
2. Keep your credit card balances low: Try to keep your credit card balances below 30% of your total credit limit. High credit card balances can indicate that you are relying too heavily on credit and may impact your credit score.
3. Only apply for credit when necessary: Each time you apply for credit, a hard inquiry is made on your credit report, which can temporarily lower your credit score. Be selective in applying for new credit and only do so when necessary.
4. Regularly review your credit report: Make sure to review your credit report on a regular basis to check for any errors or fraudulent activity. By catching and correcting any mistakes early, you can prevent them from impacting your credit score.
5. Use credit responsibly: Use credit wisely and only borrow what you can afford to pay back. By demonstrating responsible credit usage, you can improve your credit score over time.
6. Consider a secured credit card: If you have limited credit history or a poor credit score, a secured credit card can be a good option for building credit. These cards require a security deposit, which typically becomes your credit limit.
7. Become an authorized user: If you have a family member or friend with good credit, consider becoming an authorized user on one of their credit accounts. This can help you build credit without taking on the full responsibility of the account.
Sources:
- Experian - https://www.experian.com/blogs/ask-experian/11-ways-to-improve-bad-credit/
- Credit Karma - https://www.creditkarma.com/advice/i/build-credit/