Credit score is life!
Trusworthiness on financial matters is very important here.
Different people have varied advises on how to build a credit.
It was confusing!
Even the bankers have different insights.
One banker says, a person needs to have at least 5 credit cards!
“It helps in building a credit,” he said.
Further, he himself has five credit cards, according to him.
Some people though are scared to have 5 credit cards!
But a co-worker says she really has 5 credit cards.
She told me that for how many years she paid everything in cash.
But when she wanted to buy a car.
She said she had no identity.
Because she had no history of making payments.
And that’s a must in building a credit.
One must have a payment history.
Also a bank account/s to his/her name.
One colleague at work however said she only has one credit card.
There are some credit card companies which consistently send people a pre-approved cards.
But not everybody though grabbed the opportunity of just getting a credit card.
The cautious person builds his/her credit with just one credit card.
And usually, a secured credit card.
To open a secured credit card a person needs to deposit money to the bank which issues a credit card to him/her.
The amount of money deposited serves as the collateral.
To some people this process works.
They are able to slowly build their credit in a matter of months.
As long as they make payments on or before the due date.
There are some bankers who advised to: “Use your credit card in all your purchases, pay every two weeks or every payday”.
If you follow this said the banker, you will grow a good credit score.
But what’s in a credit score really?
It means a lot.
Credit score is checked if you want to buy a car/boat etc.
The approval of the loan depends on the credit score.
If the loan is approved, the interest also depends on your credit score.
If your credit score is low, the interest rate of the loan is high.
If you want to rent a house or apartment, the credit score is checked.
Your credit score is part of your financial picture.
It affects your future.