Having a good credit score can determine how easy life can be for you in the future. It determines what your rate will be on a loan, whether you have to pay a down payment on something, whether you get a job, and even if someone will marry you. So, what is a good credit score and how do you get one?
A credit score is a number that represents how well you pay back things on time. It ranges from 300-900, with 900 being the absolute best. The nation’s average score is about 680. Everyone starts out with a credit score of zero, and from there they build up. Keep in mind though; no credit score is better than a bad credit score. It is easier to build a good credit score from zero than to build up a good credit score from 300. One bad mistake can follow you for a long time.
Your credit score falls every time you miss or are late on a payment. The credit union/bank then reports it to the credit bureau to count against your credit score. If you completely stop making payments, you will be turned over to a collection agency, where your credit score will plummet from there.
Making all of your payments on time is a sure way to raise your credit score. If you pay everything off, and on time, your credit score will go up in no time.
If you do not have a credit score, and you want to know where to start, the best place to go would be your credit union. If you have had a job with steady income for longer than 6 months, apply for a small, $500 credit card. Use that card every month on something small, like gas in your car or even something smaller. Then at the end of the month when you get your statement, pay the entire amount on your card off. Do this every month, and your credit score will sky rocket.
Just having a small credit card won’t get you a 900 credit score though. A credit score is made up of several different factors.
If you maintain all of these things, without ever being late, your credit score will rise. It may seem like a big responsibility, but it is worth it in the end.
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