Building your credit is extremely important. It will allow you to borrow money at a lower interest rate, apply for new financial products, and possibly better secure jobs as some employers check your credit score.

Establishing credit history as early as possible will improve your credit score. This shows that you have a track record of fiscal responsibility.

Not paying your bills or debts on time will hurt your credit score. It makes lenders less certain that you will pay back money if they issue you a loan or give you a credit card.

Credit utilization is a measurement of how much of your approved credit line you have already spent. If you have a credit card with a $2,000 maximum spending limit, and you spend $1,000 on an item, you would have a credit utilization of 50%. Credit utilizations of higher than 34% can hurt your credit score.

You can request your credit report form any of the large three credit reporting bureaus. Make sure there are no mistakes on your report. There could be inaccuracies (i.e. your report shows that you missed a payment, when in fact you have made every payment on time) that damage your credit score.

Building credit is something that takes time and can require years of good financial behaviors. Get started early and enjoy the benefits!

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