- Start with a credit card. They are relatively easy to obtain if you don’t have a credit history. If you have a negative credit history, you can get a secured credit card, which you guarantee by making a deposit. The important thing is to use credit cards for small purchases that you are able to pay off on a monthly basis.
- Move on to an auto loan. Try to limit the amount you borrow by saving enough to make a sizable down payment. This will keep your monthly debt obligations low while taking your credit score to the next level.
- Settle in with a home loan. First determine how much home you can afford. Between your mortgage and all other monthly payments (car, credit cards, student loans, taxes, insurance, etc.), you do not want to exceed 40 percent of your monthly income.
- Teach your kids about money and credit. It’s never too early to teach your kids about saving money and making smart buying decisions. In fact, you are their primary financial role model. The smarter your kids are with their financial decisions, the quicker they will become credit worthy themselves and the less likely you will be stuck repaying debts on any loans they may have you co-sign.
- Kick your feet up and relax. There’s a reward for building strong credit early in life…and it’s that you won’t be saddled with debt later in life, will have more money saved and have the financial freedom to do the things you want to do—because you will have been in the position to plan and budget for them.
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