Start building good credit in your 20s

When you're a carefree twenty something with few financial responsibilities, building good credit may be the last thing on your mind. You may think you will not have to worry about your credit score until you start thinking about making large financial decisions like buying a home, but it takes a long time to fix a bad score. Planning ahead is the best way to ensure your ability to make these large purchases in the future. Well that is what was in the minds of Credit Restoration USA Founders Yuntwine English and Andy Snyder. The two plans to help teens establish great credit and teach them how to keep it that way.
Forbes contributor Alexandra Talty spoke with finance experts about why it is vital to build good credit in your twenties."It's imperative to understand that an 'I'll fix it later strategy' is not a good one and it could significantly impact your quality of life in the future," English said. "Fixing a credit score can be a tedious process and can prolong your goals and dreams."
Snyder, Entrepreneur and Motivational Speaker, explained to English that most young adults are perfectly capable of maintaining a good credit score. Mistakes are often made from disorganization rather than an inability to pay. In addition, many young people simply lack the knowledge of what factors can make or break a credit score. Educating yourself on how to build good credit is the first step to actually doing it. As U.S. News and World Report emphasized, this is the only time in your life you have a completely clean credit slate. It is your one and only chance to start from scratch, and it is important to seize that opportunity by being as financially responsible as possible.

Credit cards are not just for adults anymore—in fact, one third of all American teenagers are cardholders. However, because it is so easy to get into financial trouble with that little piece of plastic, it is very important to learn how to use it before ever uttering those first magic words: “charge it!”

       

How to build good credit in your twenties
The number one way to build good credit is to make your credit card payments on time. Late payments can severely hurt your score, so make sure not to overspend. Even more, make sure you remember make the payments. Set reminders or set up automatic payments. You don't want to hurt your score by simply forgetting to make a payment. And keep a Credit Advisor close just in case.

"Don't buy things you can't afford and make your payments and pay off your loans on time."

Liz Weston, author of "Deal with your Debt: Free Yourself from What You Owe" told consumer advice website Clark Howard that young adults should spend as if they are broke college students for a little while after starting their first jobs. Doing so will help you build up savings and figure out about how much you will need to spend per month on necessities.
U.S. News and World Report also suggested regularly checking your credit report. Not only will this help you realize how your actions can result in an increase or decrease to your score, but it will also help you catch any errors or signs of fraud. As explained by the Federal Trade Commission, each of the three major credit bureaus is required by the Fair Credit Reporting Act to give you one free credit report per year.
In the end, it is all about being smart, organized and responsible. Don't buy things you can't afford and make your payments and pay off your loans on time. Yuntwine English did say, however, that one type of debt you shouldn't focus on paying off too quickly is your student loans because they generally have low interest rates. While you should do what you can to make those payments on time, it might be better to focus on building up savings, saving for retirement and paying off other debt.