Many financial experts, for some reason, tell people that credit doesn’t matter if you’re just going to be debt-free at some point anyway since you won’t be borrowing money anymore, so why does keeping the credit matter?
Well, surprisingly (or not), credit isn’t just for “borrowing” money. It’s needed for more than that, it’s needed for the greater good of someone or just for your own happiness, which yet again deserves any penny.
You have to keep your credit available anytime, for many situations such as:
– Buying a house. Nowadays, especially if you’re a young adult, you should know that buying a house is almost impossible without a loan
– Emergency. As the laws of Murphy go “If something bad can happen, it will happen”.
– Investing in a car. It’s understandable, everyone needs a way of transport and a bus may not cut it sometimes.
For all of these reasons which you’ve probably already met, keeping good credit can be extremely beneficial for you.
With a low credit score, your application can easily be denied because of blemishes in your financial history. That would be a bummer. Credit history has never been so important.
There are some steps, that could be big, that a person can take in order to make sure they keep good credit up at all times.
As you probably know, credit score determination is the first step all lenders make before granting your loan. It’s OK, really, because it’s also the first thing they look at before even thinking of granting you a loan.
Your credit score contains a report of everything about your credit card history. Your payments, how many credit cards you have, what kind of credit cards they are and so on and so forth.
However, let’s say that you’re not using your credit card and keeping it for one of the reasons above. Well, in order to maintain a good credit score you’d only have to use it at least once every six months and pay the debt immediately after and you’re good to go!
If you’re constantly using your credit card, all you have to do is to regulate your payments and pay close attention to not cross the limit. If you do these things, you can easily get and maintain your awesome credit score. Try not to create more debt than you can pay as that will again lower your credit score and do not under no circumstance miss a payment because that will drastically lower your score by thirty points.
In conclusion, follow the steps as guided above and think about all the situations in which you could use your credit card. It’s useful, but try not to overuse it!