How to build good credit and not a hot mess

If you’ve already started using credit (Credit Cards, lines of credit, loans, etc.) you should be thinking about building and maintaining a good credit score. And like grades, the higher your credit score, the better. While you might not care now, in the future-you will need a healthy credit score to be able to borrow money (home mortgage, auto loan, etc). So don’t mess it up!

1. Pay it off (at least the min)

Pay the whole balance every month because having credit available with a zero balance can help you get a higher score. But if that isn’t financially possible right now, you need to at least make the minimum payment each month so you can help build and keep a good score.

2. Don’t be late

Always pay your Credit Card, loan and bill payments on time (by the specified payment due date). If it helps, set a reminder on your phone, so you get an alert a few days, or even a week, before the due date.

3. Keep your credit on lockdown

Identity theft can affect your credit score. This is because there are people out there who set out to use your credit without your consent, and even try to apply for more credit using your personal information. To help prevent this from happening, keep your Credit Cards in a safe place. Keep your passwords and PINs safe and do not disclose them to anyone.

4. Know your credit limit

When you sign up for your Credit Card, the bank will approve you for a certain credit limit based on your credit history and your income. While you are a student and your income is low, it is a good idea to keep your credit limit low so you won’t spend what you don’t currently have in your bank account.

Your credit limit is also the maximum amount you can purchase on your Credit Card before paying it off. If you attempt to make a purchase that exceeds your credit limit, your purchase may be declined. If the purchase is approved, and you exceed your credit limit, you may be charged a $25 overlimit fee. So know how much room you have left to spend on your Credit Card and avoid those fees.

5. Don’t take it to the max

While most students rely on credit to pay for their purchases try not to spend your full credit limit (a.k.a. maxing out your card) because it will affect your credit score.