Hi friends,
What is credit? How do I grow my credit? I’m not even sure what other important questions I should be asking.
My parents are immigrants and I’m also one. I moved to the U.S when I was 11. Unfortunately my parents didn’t have the chances that I had and they didn’t get much of an education. Sometimes I feel like I’ve had to navigate a lot of life in the US by myself (SATs, college applications, school loans, etc.) on top of helping my parents navigate it too. I’m a young adult now and I don’t have any guidance and would really like to start thinking about my future. I think credit is a good place to start. Any info/advice is welcome, I literally barely know much about the system. Thank you.
In: 6
A credit score or a credit rating is a measure of how likely a credit agency thinks you are at paying back any loans (credit). A higher score is better. Anyone who ever loans you money, be it a credit card, car loan or just utility payments will report this back to the credit agencies. When you want a new loan these companies are able to pull your credit score from one of the credit agencies and based on your score they can decide what interest rate they want to give you if they even want to loan you.
There are lots of techniques going around for how to quickly get a good credit score but naturally these tricks get found out and they change the algorithm to give you a worse score. The best advice for a long term good credit score is to just be a responsible adult. Do not shy away from getting loans like credit cards or low interest car loans or mortgages, however keep up on the payments and pay down the loans as soon as you can. If you have a hard time even getting a loan in the first place you can often get parents to cosign so you can use their credit score as well as yours or you can get a secured credit card where you put down a deposit on the card first. You should also look at /r/personalfinance for more information.
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