Credit Building Professionals
Do you know what a credit score is? To put it as simply as possible, credit is the ability to borrow money from a lender with the understanding that you’ll be paying it back later, often with some sort of interest payment of set fee associated with it. Lenders are only going to feel comfortable enough to give to those that they are confident will pay them back sooner rather than later. It’s important that over time you build up that trust, which will be reflected in your credit score.
Your credit score appears listed out in a credit report. Reports are put together and maintained by three independent credit bureaus, these being Experian, TransUnion, and Equifax. All creditors should be voluntarily reporting your borrowing and repayment actions to the credit bureaus, whether they be credit unions, banks credit card issuers, or any other creditors nobody is exempt or going to purposefully not report your activities. Your credit score is a huge factor when it comes to getting loans, especially with low interest.
Maintaining Good Credit
It is important to know how to build and maintain good credit over your entire life. Truly the number of reasons you want good credit are limitless, but we’ll focus on only the most critical. It’s important to have credit available to help you out with big purchases like a car or a home, most people don’t have the money on hand to directly finance these things themselves. On top of that, a credit card offers you a lot of convenience and a lot more protection over something like a debit card, and you need average to great credit to get one. A higher score also comes with perks like being able to get the lowest available interest rates on credit cards, plus other rewards. Utilities companies, landlords, and even potential employers do have the right to look at you credit score.
How to Build Credit
Now let’s discuss how to build good credit. The best thing you can do for yourself, even if you don’t have credit, it just go get a credit card and make some small purchases on it each month – enough that you know you can pay it off in full every month. Then either after every purchase or on a set day every month you need to pay your card off. This will start building up your score and paying those bills off in full every month is going to look great to any other potential lenders. It is never too late to begin working on repairing your credit.