Not only do most of us know them, but many of us have also been them. That’s right, hundreds of thousands of new college graduates have earned their respective degrees recently and been told to fly free. But, what exactly does “fly free” mean and how does someone with close to a blank slate begin and then progress to set themselves for not only personal success in life but also more financial freedom down the road?
The answer is building a good credit portfolio.
Recent grads may not have an exact blueprint of how to accomplish this. Therefore, our team here at American Dream Realty put together a brief list of “need to knows” to get them on the right track from the beginning:
Your credit history matters exponentially: Somewhere down the road you’re going to want to buy a new home, a car, apply for a new job – having good credit matters in all of these scenarios.
Find out your current credit status immediately: We advise you to visit the website www.annualcreditreport.com and go through your account and review that all of your personal information is accurate, and; if there are any mistake, to correct them immediately. Anything that looks awry could be potentially damaging.
Begin to build your credit history: Research your credit card options, and; if your options are limited, you can attempt to begin with a gas or retail store credit card. Everyone has to start somewhere and this can be a good place to start.
When you do get approved for a credit card, use restraint and be responsible: While a new, shiny credit card may seem like “free money”, it can be anything but! We advise to never amass more than 30-percent of your balance before having it fully paid off. Never be late with a payment as your credit history and practices totals up to account for about 35-percent of your credit score.
If you have any student loans, pay them off as soon as possible: As student loans are viewed as a form of debt, they are also included – along with other data – in the compilation of your credit score. However, if you do have a lot of debt, there’s no reason to have major anxiety if everything is tidy and on time. Late payments are highly, highly frowned upon.
While a huge life event such as a home purchase may not exactly be on the radar of a recent college grad today, it’s likely it will be at some point – whether that’s sooner or later is really irrelevant. What is relevant is having a pristine credit history and score when the time does come, and these few steps will serve you well here.
And, when you are ready to take the step, our brokers and agents at American Dream Realty are at the ready to serve you.