What Are The Do's and Don'ts For Establishing Credit?
A Basic Guide for Establishing Credit
Get into the right credit habits from the beginning and you’ll have an easier time establishing and maintaining credit. Follow these basic credit rules to build a solid credit reputation for yourself.
CREDIT DO’S
- Consistently use your complete name on your credit applications.
- Pay your bills on time.
- Review your credit report 60 to 90 days before making a major purchase. Ask the reporting agency to correct any incorrect credit report information.
- Live within your budget.
- Only apply for the credit you need.
- Keep your balances well below your credit limits.
- Demonstrate stability through length of employment or residence and savings.
- Wait at least six months between credit applications.
CREDIT DON’TS
- Don’t go overboard – have some credit but not too much.
- Don’t exceed or even come close to your credit limits.
- Don’t live beyond your means.
- Don’t spend more than 20 percent of your take-home pay on credit, excluding your mortgage.
