Credit Tips

Just getting started with your credit history? Haven't had credit at all? If you're careful and responsible, you can easily build an amazing credit score from nothing with little effort!

To start, make sure that all of your bills are already being paid on time. Being late on anything will cause your score to drop sharply, so make sure you aren't overextending yourself by doing any of this.

You can see that there's practical value in learning more about credit. Can you think of ways to apply what's been covered so far?

Browse online for a starter credit card, sometimes called a student card. You should be able to find one with little to no annual or monthly fee. Don't worry about the interest rate, because you won't be carrying a balance with it. Order the card and wait.

Once you have it, begin replacing regular purchases (such as groceries and gas) with the card. You should set up a separate bank account (such as a savings account) with enough in it to pay off the card entirely. This way, if you ever get in trouble, you can pay it off completely without any trouble.

As soon as you get a bill, pay the entire balance, not just the "pay this amount" amount. This ensures that you never hold a balance on it. By doing this, you are showing the issuing company (and the credit reporting agencies) that you are financially responsible and deserve more credit.

In just a few months, you should notice an increase in your limit, and offers may start coming in the mail. For now, ignore them and focus on paying this card on time. Keep it up and you'll have an excellent score in no time!