Building Your Credit

 
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Leaving home for the first time? Starting college?  As you build a life out on your own, you’ll need to take care of your financial life, too. This is a good time to start building your credit history.


What does it mean?
Your credit score is a 3-digit number that indicates how likely you are to be able to pay back loans, make rent payments, and more.


Why does it matter?
The higher your credit score, the better your chances of earning the trust of businesses and individuals who are considering lending you money. That goes for credit card companies, landlords, banks, car dealerships, department stores, and others.

Even potential employers sometimes check credit scores, especially if you’re applying for a job where you’ll be working around cash. They want to be sure that you have a good financial standing, and won’t be tempted to steal from them.


How to build a good credit score

Ready to get started? Here are some ideas.
 

  1. Start with a “secured” or student credit card designed specifically to help you build credit. These cards typically have low spending limits, giving you the chance to buy a few small things each month and make consistent payments. Find one here.
  2. Get help from a family member. If you’re getting your first apartment or car, for example, an older co-signer can help vouch for you. By making these payments on time, every time, you’ll demonstrate responsible financial management. (Keep in mind that if you don’t pay, your relative will have to!)
  3. If you have medical bills, make on-time monthly payments.
  4. Ask someone you trust to add you as an authorized user for their existing credit card. You can then use their card to make small purchases, and their regular payments will help your credit rating go up.

Looking for Sensible Advice?

Stop by a Horizon Bank branch or contact us with any questions you may have. We’re happy to help you get off to a good financial start!