A young adult spends the amount of money that is in hand. In the long run he finds himself in trouble with less money. Hence it is essential to build credit by building his credit score.
Guidelines for Building Credit for Young Adults
A Credit score is three digit number calculated by the three credit bureaus. This number allows the lender of money to know the financial status of the borrower…
Guidelines For Building Credit score:
A young adult needs to understand the following points for increasing his credit score
• On time payment of the bills is the first and the most important step towards improving your low score Timely payment of bills for six months will help in improving the credit score.
• Any error in the credit report should be rectified as soon as possible. This can be done by sending a timely written request to the concerned agencies.
• The credit report needs to be checked annually before wanting to improve the score.
• Credit card debts should be cleared in time because a high balance on the credit card is bound to lower the credit score.
• Outstanding payments should be paid off. This will update the credit report and help in raising the credit score.
• There are many services that help to increase the credit score and report without damaging the score.
• Errors on the report occur quite often. These need to be corrected by reporting to the credit agencies.
• Payments of the lowest balance of credit card or of the highest should be made first. But credit cards need to be cleared, in order to increase he credit score.
• The accounts should not be closed as this hits the credit score.
• If for some reason the account has to be closed, the newest one should be closed, because the older account carries a back history.
• Credit card balances need to be balanced out in order to even out the credit card balance and increase the credit score.
• Student loans should be fixed by the student loan company instead of the credit card agencies. This also helps in improving the credit score.
• Avoid applying for more credit. It is better to open a new account or take a new credit card. This will not reach the credit score.
• Bankruptcy remains on the credit report for 10 years. After that it should be removed to have a clear picture.
A good credit score will help a young adult in building up his credit. Thanks for watching. Please help us grow.