How to Manage your Credit Score (For the COMPLETE Beginner)
Written By: Nick Nguyen | Read full profile
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When you first get your credit card, you probably have a rush of emotions. You know, that giddy feeling as you get to unbox your shiny new piece of plastic. I don’t know why, but every time I open a new credit card, it’s like Christmas. I can’t wait to swipe it!
But hold on. You don’t want to go trigger happy and start maxing out your limit! Take it slow and focus on two things at first:
The most important thing is to not put yourself in debt. This is where a lot of people get into trouble. They think that since their credit card statement says the minimum balance is only $25.00, they’ve only got to pay $25.00 to be on time. But, what most people don’t know is that the rest of their balance accrues an outrageously large amount of interest. Like 15-22%! That’s just insane. It’s understandable though. Those credit card companies are sly. They hide all those details about interest rates in the fine print on the second to last page of your statements and don’t make it clear how the “interest free for the first 12 months” promotion works. So just be safe and don’t pay the minimum, pay it all off on time! If you’re good with budgeting and know you don’t overspend, make your life easy with autopay.
The other thing you need to remember is that you don’t want to max out your cards. We hear this term get thrown around a lot. Even if you do end up paying off the full balance at the end of the month, you look risky to the credit card gods. They don’t want you spending all your money in one go because there’s a chance that you won’t have enough to pay them back! This happened to me with my Costco Citi Card. I only use it for gas and things at Costco, but with a credit limit of $1200, I was always maxing it out. Not a good move. For months, I was stuck at a 760 credit score and didn’t know why until I did a little more research.
Doing these two things should get you to 700+ in as little as a year! Everyone at Nguyening Lifestyles started off this way in college with only a couple of cards, and now we’re a part of the 800 club. Woo-hoo!
**Nguyening Lifestyles is not a financial service professional and is not liable for any decisions you make regarding credit cards or managing your debt. We are simply here to entertain and provide content for educational purposes only. Therefore, we are not liable in any capacity for any actions that may result from reading this post. Proceed with using any type of credit card, credit line, debt, credit reporting company, etc. with caution.
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