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Building Your Credit Score

When you are applying for credit cards or a loan, your credit score factors greatly in terms of the amount, interest and approval. However, those who are students are starting their first job may not have any credit. Not to worry, there are ways to start and build your credit score for the future.

Image by TheDigitalWay from Pixabay

Whether you have a part-time job or not, one way to start building your credit score is to apply for a secured credit card.  The only differences compared to a regular credit card is that a security deposit is needed as well as a possible higher interest rate and little to no benefits. Try to find one with no annual fee and a low non-introductory interest rate.  The key is to pay off the charges by the due date and maintain the security deposit. It will build your credit score unlike a prepaid credit card.

This will lead to better opportunities for increased credit and rewards plus a higher credit score to gain access to financing and loan approvals with lower interest rates.  Keep in mind that a good credit score is tied to your ability to pay the entire balance on time.  Consistent late payment will affect your credit score, not to mention the high interest needed to carry the balance. Control over your expenditures will greatly help maintain that excellent credit score that you strive for.

Below is a breakdown of the factors and approximate weightings that are used to calculate your credit score.

30% - Utilization

35% - Payment history and derogatory marks

15% - Length of history

10% - Total accounts

10% - Credit inquiries



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