Having a good credit score is a must in today’s financialized society. A good credit score allows you to qualify for better financing offers including credit cards, car loans, and mortgages. So how can you build credit and what do you need to know to build credit quickly? We’ll fill you in!
What to Know About Credit
There are three things you must know about building a credit score:
1.Credit cards matter – Having a credit card is one of the very few ways to open what is called as a “revolving account.” A revolving account is one that is not paid off in a series of installments or pre-calculated payments. People without a credit card or line of credit will not have revolving debt experience and thus have a lower top score ceiling than people who do.
2.Credit scores update monthly – Your credit score will update monthly when the credit bureaus begin to receive reports from all the major financial companies. The database from banks is given to the credit bureaus and then each month after your due date your information is promptly updated on your credit report.
3.Savings isn’t important – Your age, income, and savings are all details that are not included on your credit report or in your credit score. These details may be available elsewhere – and may be required for a loan – but it is not taken into consideration when bureaus evaluate your creditworthiness.
Taking care of your credit is one of the most important things you can do. Understanding all that goes into your credit score is just as important. At all times, try to stay up to date on your credit report and check your credit score once or twice per year just to make sure you make quality forward progress in managing your credit history.