September 1, 2022
Finance 101

Building Your Credit 101

Written By:
Haley Sacks
(aka Mrs. Dow Jones)

Your credit score is your financial GPA. It tells lenders how trustworthy you are. So whether you're leasing a car, trying to get a mortgage for a house, or just trying to cop a new travel credit card, good credit unlocks great interest rates & lots of chic financial opportunities.

So, what are my best tips for building a healthy credit score, you ask? Look no further than here, my soon-to-be rich person:

  1. Start Small - Nobody is BORN with a good credit score. We all have to build it. Wondering how? Start by picking a credit building or low interest card. At this point- we simply need to show the Credit Bureau that you can pay a bill on time. They love that.
  2. Check your score (but not too much!) - We all want to be in the know with our credit score, and we should be! There are plenty of websites and apps to check your credit score frequently but beware. Your credit score takes time to build. It's not useful checking it everyday, and you may drive yourself crazy doing so. I recommend checking in once per month to see the progress you've made. Also, make sure to not have more than 2 hard inquiries on your credit in a calendar year. Too many hard inquiries will negatively impact your credit score.
  3. Maintain a low balance to limit ratio - Have you heard of credit utilization? Your credit utilization is the ratio of your total credit to your total debt. It's one of the biggest factors in not only building your credit, but maintaining a healthy score.  That's right — credit utilization accounts for around 30% (!!!) of your credit score. The lower your credit utilization percentage, the better your credit score will be. Make sure you're paying off/down those cards to keep your credit utilization under 30%.

Want to learn even more? Start Here might be the course for you! I walk you through all the ways to set you up for financial success in your life to get you prepared for handling the big bucks.