Written by: Abigail Ellis Published: December 6, 2024
When I first went to college, I had no idea how credit worked. Like many other students, I got caught up in the excitement of independence and the seemingly endless opportunities to shop. I still vividly remember walking through campus, spotting booths with shiny freebies—t-shirts, water bottles, and even fast-food gift cards—offered to anyone who signed up for a credit card. At the time, it felt like I was unlocking a new level of adulting. What I didn’t realize was that I was stepping into a financial trap.
I signed up for multiple credit cards, excited by the idea of having money to spend at the mall, buy concert tickets, or treat myself to new clothes. The lenders didn’t explain how the cards worked. And I, unfortunately, didn’t ask. I assumed it was like free money—I could pay it back when I felt like it. What I didn’t understand was how fast that “free” money could turn into debt, especially when I had to pay it back with a staggering 29.99% interest rate. Interest? I didn’t even know what that was at the time.
It didn’t take long before the minimum payments started piling up, and I realized how in over my head I was. Calls from credit card companies became a daily stressor, and my credit score—something I barely even knew existed—started to take a nosedive. It was a hard lesson to learn, but it was also a wake-up call that helped me take charge of my finances.
Now, I want to share what I’ve learned so you don’t have to go through what I did. Whether you’re starting from scratch or working to rebuild, these tips will help you build and maintain a positive credit score.
Tips for Building and Maintaining a Healthy Credit History
Start Small with One Credit Card
If you’re new to credit, stick to one card with a low limit. Ideally, choose a secured credit card, which requires a deposit as collateral. This makes it easier to manage your spending and build a positive credit history.
Pay Your Bills on Time—Always
Payment history accounts for 35% of your credit score. Set reminders or enable autopay to avoid missing deadlines. Even one late payment can hurt your score for months.
Keep Your Credit Utilization Low
Credit utilization refers to the percentage of your credit limit that you’re using. Aim to use no more than 30% of your available credit. For example, if your credit limit is $1,000, try to keep your balance under $300.
Don’t Close Old Accounts
The length of your credit history matters, so keep older accounts open even if you don’t use them often. This helps build a longer credit history, which can boost your score.
Avoid Applying for Too Many Credit Cards
Every time you apply for credit, it triggers a “hard inquiry” on your report, which can temporarily lower your score. Only apply for credit when you need it.
Building good credit takes time, but it’s worth the effort. A healthy credit score can open doors to better loan terms, lower interest rates, and even job opportunities. Learn from my mistakes, start small, and stay consistent. Trust me—your future self will thank you.
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