Tips on How Millennials Can Build Their Credit Scores

Millennials are becoming more and more in touch with their credit scores. This is partly because many of them are coming to the age where they tend to be more interested in buying homes and having low insurance rates. Building credit at a young age can be beneficial down the road when it comes time for some of life’s big moments.

However, there’s so much misinformation about how to deal with credit. Believe it or not, more than 1 in 5 credit card users have wrongly carried a balance to help improve their credit scores. So, getting the right information about good credit management is key.

How can millennials build their credit score? See below for some helpful tips!

Keep Balances Low

When opening their first credit card, Millennials must make sure to only charge an amount they can afford to pay off every month. To avoid higher fees and big credit issues, try to pay it on time and continue to have a low balance.

Having lower credit card balances compared to your credit card limits will reward you with higher credit scores. If you want to improve and maintain a good credit score, it’s important to keep your balance at or below 30% of your credit limit.

Set up Automatic Payment

Missing a credit card payment will affect your credit score immensely. Unfortunately, missed credit card payments are one of the most common things Millennials tend to do because they seem to forget about them.

To avoid getting a red mark on your credit report, set up automatic payment on credit card accounts. This will help ensure that the bills don’t slip by.

Follow up

Millennials tend to forget that they had bills to pay in the first place. To avoid any conflict, try to follow up about bills and check to see if any debt is owed. Another way is to request a credit report from a national credit reporting company such as Equifax or Credit Karma. This can be done for free every 12 months to see where you stand on your balance.

In any case, do more research on credit scores before you purchase a home. It’s important to have some knowledge about what goes into your credit score, how to improve them, and news on changes to the credit scoring and reporting industry.

If you want a full team of Mortgage Professionals, we’re happy to help. Acting now is a wise way to achieve your goals for tomorrow!

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