The year is 2014...Working Full time. Bought my first car (in my name!), black sports-car, v6 engine, 370 horsepower, red leather seats.... and my car note is only $237. HOW? Well, it’s this thing called Credit. A history of all your payments, debts, and a three digit number that determines whether you’re a risk or not.
I learned a lot when I financed my car. I also thank my parents for setting me up in a good position to maintain & build an excellent credit score. I now see why it’s important to pay your bills ON TIME.
What if you have no credit?
In order to start a credit history, you have to go into some kind of debt. Open a credit card, store card, gas card, cell phone bill in your name, or even borrow from yourself (yes, you can borrow from yourself).
If you are taking the credit card route, make sure the company you choose to go in debt with, reports to the credit bureau.
How to check your credit history?
You can obtain your credit report from three companies- Experian, Equifax, and Transunion. They are now required by law to give you a free report once a year. The best way to keep track of your credit history all year, is to get a free one from each company every 3-4 months.
While checking your report, make sure everything lines up. Make sure all the open accounts are actually yours. Many people find someone has taken their identity by regularly checking their credit history report
What is a poor, good, and excellent credit score?
300-579 is Poor
600-720 is Good
730-800 or above is considered excellent.
What to do next?
More research! Especially if you are about to venture off on your own, buying a car, renting or buying a home, or financing anything.
Download apps to stay on top of your credit, such as Credit Karma, Mint, and Credit Sesame.