Tips for Building Good Credit

You’ve probably heard how important it is to have good credit when you buy a house or a car. Maybe it seems like a far off goal, so it’s fallen to the back burner. However, it’s an important concern that you should make a priority. Building and maintaining good credit is a vital step towards creating a solid financial foundation. Here are a few simple steps that may help build credit:

1. Apply for a credit card—not 10 credit cards. Make some purchases each month, but avoid reaching your credit limit. Lenders generally do not want to see that you have maxed out your limit every month. Pay your credit card on time. Also, it can be wise to keep your first credit card. The longer you have a given credit card, the more credit builds on it. If you cancel it, you’ll lose the history and credibility that you’ve built with that creditor or lender.

2. It can be okay to have some debt. Good debt can include things that increase your overall wealth, but that you cannot afford to pay off immediately, such as student or car loans. Don’t forget that you have to make each payment on time. Making timely payments can show a lender that you are creditworthy.

3. Check your credit report at least once a year to make sure that the information is correct.  Identity theft is very prevalent these days! Verify that the credit cards and loans on the report belong to you and that the information about your balances and payment history is accurate. It’s also a good idea to confirm that all of your creditors are reporting on each of your accounts. One free credit report can be obtained each year per individual from each of the national credit-reporting bureaus. Make it a habit to review your credit history every three months with a report from a different agency. Check their links to obtain a report or request it from the following site approved by all three bureaus: www.AnnualCreditReport.com.

 

Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional. Hewins does not provide tax, accounting or legal services.
Thuong Thien
Thuong Thien

CFP® | Senior Financial Advisor

Thuong Thien, CFP®, is a Senior Financial Advisor with Hewins Financial Advisors in Redwood City and San Francisco, CA. Thuong focuses on developing comprehensive financial and investment strategies for high-net-worth investors; she also specializes in socially responsible investing (SRI) strategies and deferred compensation planning for technology executives.

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Tips for Building Good Credit

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