Credit building tips for new gradsThis guest post was written by Go Banking Rates, where you can find the original source article "For Recent Grads, Good Credit is Gold" by Lisa Thompson, Licensed Investment Consultant.
Graduating from college is a huge moment in a young adult's life. It often represents that final leap from semi-independence to being a real-life grown up. That said, the responsibilities associated with adulthood are probably furthest from most new or soon-to-be graduates' minds.
It may not be the most exhilarating topic, but your post-graduation finances need to be addressed sooner rather than later. Most importantly, you need to start building credit if you have none or improve upon what you already have. Don't expect to move in to your dream apartment or get a credit card of your own without a high score.
Since most new grads are unfamiliar with building credit, here are a few tips to help you:
- Build a budget. Begin by recording all expenses for a couple of months so you have an accurate idea of your spending habits. Budget for all of your monthly expenses, including rent, student loans etc. along with an estimate of variable expenses such as food and entertainment. Stick to your plan to avoid over-spending and incurring debt.
- Get one credit card. You may be tempted to send out applications for plastic left and right, but this can get you into trouble fast. Show creditors you are responsible by picking just one low-interest credit card and making small purchases with it. Always pay off the monthly balance in full to avoid paying interest. If you must carry a balance, however, try to keep less than 30 percent of your limit.
- Say no to retailers. It's tempting to save that extra 10 percent at the register by applying for the store's credit card. Don't! Most retailer cards come with high interest rates and annual fees.
- Pay bills on time. This may seem obvious, but late payments can have a serious detriment to your credit. This is one of the easiest ways to maintain good credit.
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