Credit history, creditworthiness, credibility…these are all terms I’ve heard over the years but never quite grasped…until I stepped into adulthood.
Growing up I received tons of wisdom and advice from family, a considerable amount from my Grandma.
One tidbit I recall her reiterating over the years was to ‘take care of your credit!’
However, It wasn’t until after I finished undergrad and had made several poor financial decisions that I finally understood what she meant.
See, your credit is like your identity (at least in America); Jay-Z basically made an entire album about it (4:44). Your credit is the image to the world of your worthiness; in some ways it defines you.
How trusting are you?
Are you a person of your word?
Do you follow through with agreements?
These are serious questions, especially when you talk about home mortgages, starting businesses, buying cars and even marriage. No one wants to get in bed with a lousy or unreliable person. Yes…credit is a major factor in the adult world.
Now if you’re anything like me, you did not listen to your grandma’s words of wisdom and you went out into the world hard-headed and financially blind. Don’t be sad, there are ways to improve your credit.
- PAY YOUR BILLS
I know this may seem obvious but I’m going to address it because it wasn’t obvious for me. While in college, I got this nasty little habit of ‘if I didn’t like something’, I would just stop paying for it. A cable bill or cellphone service (contract or not), if I didn’t like it, I would ditch it. Now unbeknownst to me at the time, when you agree to certain services, you can’t just end them because you didn’t like them and not expect some type of penalty. No, early ended contracts result in fines. And if you don’t pay the fines the amounts get turned over to collection agencies who are BFFs with the credit score companies.
2. CREDIT CARDS
In the past, I had allowed a few of my friends to engrain a sense of fear in me when it came to credit cards. However, after having mine for over 2+ years I’d like to say there is no need to fear credit cards. In fact, they tend to come in handy and be real life-savers. For example, a few months ago my back tire blew and I needed to get a new one. The only problem was that rent was due and my funds were low…issues like this are where credit cards really come in handy.
Now, the flip side to credit cards is that you NEED to have discipline. This means, not going to buy $600 shoes when your credit limit is $800 and your weekly income is $300.
Basically, don’t spend beyond your means.
Also, be mindful of your interest rate.
3. STUDENT LOANS
Sadly this is a HUGE issue in America. And while I would like to argue why other countries in the world offer free higher-education and the U.S. doesn’t, I’ll save that for another post.
If you were fortunate enough to go to college but not so fortunate enough to be born into wealth, you are more than likely familiar with the anxiety that comes with student loans.
Yes, Student loan debt can be scary and often times feel like a weight that will never lift. But, it is not the end of the world.
If you’re fresh out of school and dodging those 1800 calls from Sallie Mae, don’t fret. Man(or woman) up and answer the call. Explain your situation to the person and ask them to work something out that is FEASIBLE for you. No one leaves school making $500k a year and most of the times the person on the other end of the phone is understanding of that. —-Communication is key.
Also, loan forgiveness programs and deferment are options.
4. INVEST IN PROPERTY
I’m a newbie to this one and I don’t have much experience but I will say that my next big purchase will be property.
Because it’s an investment. When you own your on property… it’s yours! And for the money that you spend monthly on rent, you could be paying that toward something that you own.
*Also, it will boost up your credit score up!
5. BE A CREDIBLE PERSON
Your word is your bond. No one likes a flake.
A few other tips:
1. Find yourself a credit counselor. Also, bankers are helpful.
2. Pay your bills —and on time! I can not stress that enough.
3. Apply for Reward Credit Cards. The perks are worth it! #TravelPoints
4. If you’re looking to boost your utilization ratio, get yourself a card you only plan on using for small purchases (lunch, gas etc) and pay that bill early every month. It’ll do your credit score wonders!
5. Don’t get caught up on how much money you’re making.
Remember, it’s not about how much money you make but how well you manage and budget with what you already have.
6. Don’t be afraid to move back home.
I have a peer who moved back in with his mom after undergrad and worked 3-years straight and is now Student-Debt free! *whoo whoo*
7. If your credit isn’t the best, apply for a secured credit card.
8. Treat yo’self!
This doesn’t mean shopping sprees every pay period, but if you’ve been working hard and paying everything on-time, treat yourself to something nice every now and then.
If you have any tricks or tips, please share in the comments section!