Thank you to Wells Fargo for sponsoring this post. All content and opinions expressed are my own.
I thought I was being smart with money and credit. I paid everything in cash. I carried no debt. I made sure I didn’t spend more than I made. I tracked all the money I spent and earned, down to the penny. And I saved almost half my income (this was, if you couldn’t tell, before I had kids!).
So when my husband and I were considering buying a house, we checked our credit scores. His was great. Mine? Turns out, I had no credit all these years. I assumed that because I didn’t take any debt or paid interest, that my credit score would be fantastic.
But it made sense once I put the pieces together. Even though I was prudent about saving and budgeting, I also wasn’t building credit. I paid for my car in cash and didn’t take out a loan. I lived in an apartment and carried no mortgage. And the last and only student loan I ever had was during freshman year when I borrowed some money for a computer.
I was practicing sound financial habits. But in the eyes of the financial world, I had no record of whether I could pay off any loans should I ever need one. Hence, the lack of a credit score.
But building credit from nothing is possible. First, I got a credit card. I pay off my balance every month so I never miss a payment. I also continue to spend less than I earn. I don’t treat the credit card as “extra money” and instead use it as a credit-building tool. And with the credit card, I’m even able to earn bonuses and points that I wasn’t able to with a debit card or cash.
To make sure my credit is in good standing, I check my balance frequently. I avoid maxing out my credit amount. And I continue to practice good financial habits by maintaining an emergency fund and paying my bills on time.
Almost a year after I opened my credit card, I checked my credit score—and it was just as high as my husband’s! I had proven to the financial world that I could indeed manage and pay off any loans I would potentially take.
No matter your credit score, get tips at Wells Fargo for building better credit. At the Smarter Credit™ Center, you’ll find useful tips for improve your credit score, such as:
- Paying your bills on time
- Checking your balance
- Contributing to an emergency fund
- Avoiding maxing out your credit accounts
- Monitoring your credit
I relied on the above tips and more to take my credit score from nothing to great. I learned this a little too late for my taste, but I’m glad I was able to get on the right path to good credit.
Learn how to improve your credit score with Wells Fargo and get a wealth of information to guide you to better credit habits.
Your turn: What is your credit story? What are your tips for better credit habits?