One of the most popular questions asked by younger consumers is how do I build credit? Well there is a right way to build credit and a wrong way to build credit, here are some tips.
The Wrong Way to Build Credit
Most people think that in order to build good credit, they must borrow an obscene amount of money and pay it back. This is absolutely not true. First off, you do not need more than one or two credit cards or loans to establish good credit and secondly, you do not need to borrow more than a couple of hundred dollars, if that. In fact, never spend money on your credit card to establish good credit. The more you owe, actually the worse your credit score will be because your income to debt ratio is taken into account.
The Right Way to Build Credit
Building Credit takes time. Expect to build credit over the course of a few years. If you are 18 and receive your first credit card, by the time you graduate college, you will usually be established.
Have one or two credit cards top. You don
