Start NOW: Building Solid Credit in Every Stage of Your Life (Part III)
Written by James Chan, Dongmiao Cui   


Now that we know the various components of a credit report, we can now move on to discussing strategies that can help boost your credit rating. Building a good credit score is extremely important, as it can help you:
  • Pay less to get mortgages, car loans, and other credit;
  • Be more likely to get offered a job;
  • Get brokerage or bank accounts with minimal haasle;
  • Pay less, perhaps much less, for insurance.
This section walks you through the four stages of your credit life: and outlines direct, actionable ways that you can use to up your credit score in each of these stages.


New College Craguates



This is probably the first time that you receive the big paychecks from your brand new jobs. However this usually comes with increased expenses, such as new apartment, new car payments, eating out, entertainment, and other social activities.  In addition, student loan re-payments generally start 6 months after graduation.  On top of that, the state and federal tax, social security and medical tax, along with 401K, Flex Account, and similar contributions will lower the actual income even more.  By some measure, finances for new graduates are probably just as tight as college days!

Here are a series of actionable items that you can work on to continue building your solid credit history:
  1. Student Loan Consolidation: You can expect to pay less than 2% APR after consolidation.
     
  2. Tracking Expenses: Track your expenses to make sure that you are spending within your means. Make sure that you do not max out your credit cards or unable to pay your bills in full, on time.
     
  3. Expanding Credit: You can either request your credit card issuer to increase your credit limits; or get new credit cards that offer generous credit limits.

    Most credit card companies do a hard pull before approving a credit line increase. However, Citibank, Discover, and American Express are known to sometimes increase your credit limit without the hard pull. You should ALWAYS ask if they will do a hard pull when you make the request over the phone.
     
  4. Credit Reports: Get your credit report at least twice a year. Verify that everything is correct and fix any error as soon as possible.
     
  5. Aggressive Credit Building: if your credit score has reached the mid 700's, read the article A Few Extra Bucks on how to aggressively expand your credit.

Return to Part II: Credit Building - College Years
Continue to Part IV: Credit Building - Matured
 
Last Updated on Saturday, 25 December 2010 05:20