You’ve finally received your first credit card and you’re ready to use it.  But before you use it, you’ve always heard people talk about how important a “credit score” is.  If you’re familiar with it already, that’s great, if not, here’s the definition.

A credit score is a number based on a person’s credit file.  It basically points out a person’s creditworthiness and the likelihood of that person if he/she will pay off their bill in time.  Lender’s use this score to determine if you’re edible for a loan or credit card.
Now that you have the rundown of what a credit score is, we are going to give you a few helpful tips on how you can improve your credit score.

Pay off your bill ASAP

The most important thing when it comes to your credit score is paying off your bill in time.  It’s always best to pay off your bill as soon as you get it.  This way you won’t have to worry about forgetting about it.  Too many late payments on your report can hurt your credit score drastically.  Remember that a credit score is crucial when it comes down to applying for a car loan, credit card, and mortgage.

Don’t max out the cards

Whether you have one credit card or twenty, it’s important that you don’t come close to maxing out these credit cards.  The reason this is, is because lenders will look at your report and if you have too much credit tied up, they may feel hesitant to lend to you because they may think you don’t have enough to pay their bill on time.

It’s best to pay off in full

Regardless of what people say about paying off only half of your bill each month is only a myth.  It’s wise to only charge what you can afford each month.  Not only will this allow you to avoid debt, it will make you a responsible credit card user.  It other terms, you want to treat your credit card as if it were a gift card.  Once you reach your monthly budget, you won’t want to charge anything you can’t afford.

Start Young

The best way to start establishing credit is to apply when you’re a college student.  Lenders are more likely to give a college student a new credit card before they give a 25 year old a regular credit card.  The reason credit card companies’ do this is because they have a theory that if a student gets into card trouble, the parents will bail them out.

Avoid opening accounts too fast

A rule of thumb is that you don’t want to open up a ton of accounts too fast.  This means you want to avoid opening up a department store, furniture store, and credit card all in the same week.  If you start allowing yourself to have too much credit, lenders will be more hesitant to lend to you because of this fact.