All hail the Prince of Financial Planning…. (residents bow). Now it is time for you to be crowned King. But…not yet.
First you must learn what it takes to establish good credit.
First off, you need to know what credit is. Put aside your first thoughts of school or your “street cred” attitude (because being cool rules). What you will learn about credit here is a little different.
Credit is a financial term that establishes your ability to purchase and maintain payments and secure a financial stability by a type of score that says, basically, “I am trustworthy”. It’s basically called a “credit score”.
The score is particularly important when working toward borrowing money from a bank or some other financial institution, or applying for a credit card. Typically what lenders look at regarding credit are these essentials: Bank Accounts, Employment History, Residence History, and Utilities in Your Name.
It’s hard to believe that bills, expenses, even credit cards in your own name are what help you build your credit. Likewise, in order for you to establish your own credit card, you need to have your actual “credit score” determined to see if it’s worthwhile for you to have a card. This is what bank accounts, employment, residence, and utilities can tell a potential loan officer or credit card company.
These are the questions to ask: is you account in good standing? Do you have/Have you had reliable employment? How many times have you moved in the past few years? Are you keeping up on your utilities?
If your answers are positive answers, you’re on your way to becoming a Credit King. That’s the first step of establishing good credit. Now kneel, young Prince, as I christen you into the world of Financial Purity. Welcome.
Your next step as King, though, is this: make sure you pay off your credit cards, your loans, your house, EVERYTHING ELSE, so that your credit actually STAYS good. That, my good King, is another story.