by Riley C.
Let's say you just got your first credit card, and want to build up your credit score. You know it is important to do, but don’t know how to do it. We if that’s the case for you, you’ve come to the right place. Today I will inform you about why credit matters, how to build good credit, and how to avoid losing credit.
Why is credit so important?
You may look at your credit score and think to yourself, “It's just a number, how and why does it matter?” Well, your credit score is basically a sum of the history of your spending. A good/high credit score means you have been responsible, while a bad/low credit score means you are rather irresponsible. Many important people may look at your credit score, such as Mortgage Lenders, Potential Employers, Landlords, Auto Loan givers, etc… If you want to access these services, a good credit score is essential for the best experience. Furthermore, having a good credit score will help you to live an easier, less stressful life.
How do I increase my credit score?
There are several ways to do this. One of the first important ones is to look at your credit reports. Knowing your credit history can make it easier to increase your credit, by letting you know what helps and hurts your credit score. (You should also watch for fraudulent activity, as that could lower your credit score without you knowing why.) Secondly, and very importantly, is paying your bills on time. According to Investopedia, payment history has the biggest impact on your credit score, especially for FICO credit scores, which are used by more than 90% of top lenders. Being responsible and paying your bills on time will help to massively build your credit. To add another level to that, keep your usage at 30% or less of your total credit limit, and make sure to never go over your limit. A simple rule of thumb is to be able to pay off your entire balance each month.
How do I prevent my credit score from going down?
There are several ways in which your credit score can drop, which is always a bad feeling. The big one is if you fail to make a payment on time. This hits you with the triple whammy, that is:
You still owe the money
You have just encountered late fees
Your credit score has dropped.
Avoiding this problem is essential. If you can’t pay off the full balance, which is the best case scenario, then be sure to always make the minimum payment on time.
In Conclusion:
While it is relatively easy to increase your credit score, it is much, much easier to lower it. Paying careful attention to what actions you take, and planning ahead will greatly help you in the long run. Following these tips, and doing your own research, will enable you to build an excellent credit score!
Works Cited:
Irby, LaToya. “Reasons Why Having Good Credit Is Important For Modern Living.” The Balance, 31 Aug. 2020, www.thebalance.com/reasons-why-good-credit-matters-960178#:~:text=A%20good%20credit%20score%20is,able%20to%20pay%20their%20debts.
Lake, Rebecca. “Want a Better Credit Score? Here's How to Get It.” Investopedia, Investopedia, 5 Apr. 2021, www.investopedia.com/how-to-improve-your-credit-score-4590097.
Proctor, Written by: Clint. “Why Did My Credit Score Drop?” Credit Karma, 14 Apr. 2021, www.creditkarma.com/advice/i/credit-score-drop.
I think your article was very informative. It's a good article to help refresh themes reviewed in our last unit. I enjoyed how organized your article was and found it easy to follow. Along with understanding credit score I also like how you added tips to help educate the reader on how to maintain a high credit score and inform of the penalties. One thing I would add is how to start with credit. Using strategies such as piggybacking off a parent or using a secured card.
ReplyDeleteYour topic really correlated with what we are now learning in class so it was cool to get a more in depth analysis on it! Your blog offered some good tips and pointers on how to keep your credit score high and it was also very well written and organized. Listing the tips definitely helped me remember them better. Good job!
ReplyDeleteEveryone talks about their credit score and everyone knows that to have a larger credit score is better, but nobody knows much about how to increase that credit score. You talked about both sides of what to do and what not to do which I found helpful as well as what having that increased credit score can do for you in the future. Overall very informative and clear.
ReplyDeleteReally cool post! I agree with this, building credit is extremely important and it's a main deciding factor of getting approved for things like loans and even housing. Where you said “A simple rule of thumb is to be able to pay off your entire balance each month.” That shouldn't be a rule of thumb, that should be a common scene.paying off your card every month is the most consistent thing you can do to build credit and you should be doing that anyway.
ReplyDeleteYou did a great job presenting the informations! You made it easy to understand, & this something that everyone should understand & know! I knew how to lose points on my credit score but I thought I would have to a lot more to get my credit score up. Thank you!
ReplyDeleteAshley Anderson - I love how you did a post relating to what we just learned in class! I definitely agree that building your credit is one of the most important things you can do in the world of finance. I also think it's interesting that you mentioned "while it is relatively easy to increase your credit score, it is much easier to lower it". I really like this perspective because it enforced the idea that having a little slip-up (liking forgetting to pay your bills) will cause your credit score to plummet. According to mygreatlakes.org, they state that, "credit is part of your financial power". Credit allows you to get a credit card, a loan for a car, etc. when you need it the most. I totally agree with everything you stated in your blog and you did a nice job explaining why building credit is super important!
ReplyDeleteYou did a great job with this post. I like how you did your post on something that we are learning during class to give more information on the topic. I also like how you brought up a lot of statistics into your piece so that you would have some good credibility on what you were talking about. Another thing is that you did a great job on the organization of your post because you started it off with A short statement about credit and then went more in depth with different questions that people have about credit. Overall, you did a great job with this piece and the organization was fantastic.
ReplyDeleteThanks for including both ways to raise your credit score and to keep it from going down. I like how you brought up both the importance of credit scores and the actual ways to increase your own. I also like how you included all the important people who will be viewing your score, as to add more importance to having a good one. Very informative post, thank you!
ReplyDeleteIn the next few years many of us will get our first credit card and knowing how credit scores work is super beneficial. Having a low credit score can be detrimental if you don’t know how to raise your credit. I like how you listed different ways your credit score can drop and also rise. It is important to know that it is easier for your credit score to lower than increase. Credit scores can be a tricky topic to understand and you explained it perfectly! Your images and title of your post also drew me in as a reader! Nice work!(Ally Longden)
ReplyDeleteGood information! In addition, I'd like to talk about some of the things that I was surprised to learn impact your credit scores. First of all, having loans, including, student loans, car loans, and mortgages actually increases your credit score -- as long as you remember to pay them in time. Another thing I was surprised about is that paying off and closing credit cards actually harms your credit score. Credit scores are earned through your loans and how well you pay them back, so it is actually quite important to have loans in order to bulk up your credit score.
ReplyDeleteI liked that you covered a large variety of the aspects of credit score, such as what credit score is, how you can improve it, and why it's important. It would have been easier to focus on one part of credit score and ignore the others, but by covering more of them, we gained a more complete picture of credit score and what it means.
ReplyDeleteIt's important to know how credit scores work, as pretty much everyone in the modern world is going to need to use a credit card. This was a really informative piece.
ReplyDeleteI just got my first credit card recently! I got a student card that gets me some pretty sweet rewards that help out college students, having a credit card is definitely a huge responsibility though. If you can be responsible then having a credit card is a great way to earn rewards that save money and build a good credit score that can help you save even more money later in life. One question I have is, how can having multiple credit lines affect your overall credit score?
ReplyDeleteVery informational post. I was not that educated on credit so I was unsure how people prevent their score from getting too low. Are there any apps or websites you recommend to help with credit score details? I have heard about credit karma but have also heard that it is not that reliable. I don't see myself worrying about credit scores right now but this is very important information I will use in my future.
ReplyDeleteI heard that credit score affects everything but I didn't realize that there were so many ways to increase you credit score and how easy it can be to increase it, on the contrary it can be as easy to decrease your credit score. this is very insightful and helpful for our future lives.
ReplyDeleteCredit score is so much more important than I had originally figured. To think it could even influence your landlord's decision is scary. I have to wonder, if the main thing that will lower your credit score is making payments on time, why does anyone take on large payments they might not be able to balance? Also, I wonder how closely related credit score is to credit cards -- would having a credit card rather than a debit card be more beneficial when it comes to credit score? I look forward to finding out. The blog is great overall, and really helps to get the gears turning so I can start thinking ahead.
ReplyDeleteIt was really nice to get a refresher of what we just learned in class because the entire subject of credit is something I still lack a bit of confidence in and anything to help clear the clouds is nice. I wonder why someone would willingly spend so much to put themselves in incredibly horrible credit when they simply can follow general advice and limit their spending. Really doesn't make sense to me.
ReplyDeleteThis blog showed me strategies I actually didn't know about. There are so many ways to increase my credit score and this article was super helpful in seeing these new strategies and on the other hand I really like that you also gave ways we can stop for it from going down.
ReplyDeleteVery informational post thanks! I was not that educated on credit so I was unsure how people prevent their score from getting too low. Are there any apps or websites you recommend to help with credit score details? I have heard about credit karma but have also heard that it is not that reliable. I don't see myself worrying about credit scores right now but this is very important information I will use in my future.
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ReplyDeleteI like that you included the situations that make the most sense for people to join credit unions as opposed to banks. I also like that your post showed a variety of services offered by credit unions, including the free services offered by credit union websites and the counselling offered by credit union associates. pm.mba/project-change-management-plan
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