Secret #0024 – Building & Maintaining Credit, and Common Mistakes To Avoid

Welcome back, priceless peeps! 🐥 

I’m beyond excited to share some of my top tips and insights on building and maintaining credit with you today. So, let’s dive right in and explore some helpful tips that can assist you in building a strong credit history, understanding how credit works, and steering clear of common mistakes that can hurt your credit score. Let’s get started, shall we?

– Priceless Tay 💜

🤫 Let’s fill you in on the secret

Building credit is an essential part of achieving financial stability and independence.

Building and maintaining good credit is a crucial step towards establishing a strong financial foundation, which can help you achieve your financial goals, such as buying a car, renting an apartment, or eventually purchasing a home.

For young people who are just starting out on their financial journeys, building credit can seem daunting. However, by taking the right steps and being mindful of your spending habits, you can establish good credit and set yourself up for financial success.

I receive so many questions on how to establish and maintain a good credit score. So, today I will be sharing my secret on how I managed to maintain a healthy credit score at 22! 🤫

Credit is essentially a measure of how trustworthy you are as a borrower.

When you apply for a loan or credit card, lenders will look at your credit score to determine your creditworthiness.

Your credit score is based on several factors, including your payment history, credit utilization, length of credit history, and types of credit.

Understanding how these factors impact your credit score is essential in building and maintaining good credit.

  1. Make payments on time: Payment history is the most important factor in your credit score. Make sure to pay all of your bills on time, every time.
  2. Keep your credit utilization low: Your credit utilization is the amount of credit you’re using compared to your total credit limit. Aim to keep your credit utilization below 30% to maintain a good credit score.
  3. Apply for credit sparingly: Every time you apply for credit, it shows up on your credit report as a hard inquiry. Too many hard inquiries can hurt your credit score, so only apply for credit when you really need it.
  4. Monitor your credit report: Check your credit report regularly to make sure there are no errors or fraudulent accounts in your name.
  5. Build long credit history: The length of your credit history is also an important factor in your credit score. The longer you’ve had credit, the better your score will be.
  6. Use different types of credit: Having a mix of credit, such as a credit card, auto loan, and student loan, can help improve your credit score.
  1. Pay more than the minimum payment: While making payments on time is important, paying only the minimum payment can hurt your credit score over time. Try to pay more than the minimum amount due, even if it’s just a little bit more each month.
  2. Don’t close old credit accounts: Closing a credit account may seem like a good idea, but it can actually hurt your credit score. This is because it reduces your total available credit, which can increase your credit utilization ratio. Instead, keep old credit accounts open and use them occasionally to keep them active.
  3. Avoid maxing out your credit cards: Even if you pay your credit card balances in full every month, maxing out your credit cards can hurt your credit score. Try to keep your balances well below your credit limit to avoid high credit utilization ratios.
  4. Be careful when co-signing loans: Co-signing a loan for someone else can impact your credit score. If the other person misses payments or defaults on the loan, it can hurt your credit score as well.
  5. Use credit wisely: Only use credit for things you can afford to pay back. Don’t use credit to fund a lifestyle you can’t afford or make purchases that aren’t necessary.

  1. Credit Karma – provides free credit scores and reports from two major credit bureaus, TransUnion and Equifax.
  2. Credit Sesame – offers free credit scores and reports, as well as credit monitoring and identity theft protection.
  3. myFICO – provides credit reports and scores from all three major credit bureaus, Experian, TransUnion, and Equifax, for a fee.
  4. Experian – one of the three major credit bureaus, provides credit scores and reports for a fee, as well as free credit monitoring services.
  5. – offers free credit reports from all three major credit bureaus once a year, as mandated by federal law.

📰 In the news:

What credit score do you need to buy a car? 🚗

According to Insider’s new article, Americans are borrowing more money than ever to buy cars.

Why it matters

When you’re looking to buy a car and need a loan, a good credit score is key. If you’re above 660, you’re considered a “prime” borrower. But there isn’t an official minimum credit score for getting an auto loan. The higher your credit score, the better terms you’ll likely get on the loan, though.

By the numbers

Americans are taking out bigger loans than ever to buy cars. Experian, a credit-reporting agency, reports that the average loan amount for a new car is over $41,000, and just under $28,000 for a used car in Q4 2022. In total, Americans owe over $1.417 trillion on their auto loans, up 8.6% since last year.

It may not surprise you that over 30% of the $1.4 trillion in auto debt is held by borrowers with credit scores below 660. However, you can still get an auto loan with a low credit score. Experian’s analysis shows that in Q4 2022, borrowers who received financing for a new car had an average credit score of 738, while those who received financing for a used car had an average credit score of 678.

Some auto lenders may ask for a cosigner if you have a low credit score. A cosigner is someone who agrees to take responsibility for paying back the loan if you can’t. Auto lenders may use the FICO Auto Score to decide whether to give you a loan. This score predicts the risk of you defaulting on car payments and ranges from 250 to 900.

The big picture

Although FICO is the most widely used credit score, some auto lenders may look at your credit score from VantageScore, a newer credit scoring system developed by the three credit bureaus — Equifax, TransUnion, and Experian.

Keep in mind that your debt-to-income ratio, complete credit history, and down payment amount will also impact your loan terms. So, make sure to have all your ducks in a row before applying for an auto loan.

🧋 Taylor’s Toolkit

Building your credit score is super important, just like finding a job or a place to live.

Basically, your credit score is a number that shows how risky it is to lend you money. It can affect whether or not you can get a loan or credit card, and even how much interest you’ll have to pay.

As a young adult, you might not have a credit score yet, but don’t worry! Here are some easy tips to get started:

  1. Try opening a secured credit card, which is kind of like a regular credit card. You make purchases and pay the bill, but you also make a deposit when you open the card. This deposit becomes your credit limit, which is a great way to start building credit.
  2. If you’re able to get your own credit card, look for one with a good interest rate and no annual fee. And most importantly, pay your bills on time! Autopay can be a helpful tool to stay on top of payments.

Hope this helps you out on your financial journey!

That’s it for this week!

Building credit is a crucial part of achieving financial stability and independence, and as a Gen Z individual, you have the opportunity to establish a strong credit history early on in life.

By following the tips and strategies outlined in today’s newsletter, you can build and maintain a solid credit score that will help you achieve your financial goals for years to come!

Stay tuned for more!


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Priceless Tay is where ambition meets financial finesse, and where go-getters like you come to thrive. It’s the ultimate resource inspiring the savvy go-getter to achieve their goals with confidence.

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