Credit Sucks, But It’s Also Kinda Cool

Now that you’ve got your spending under control, let’s talk about that fair-weather friend: credit.  Credit kind of sucks, but there’s no escaping it.  It’s also really confusing.  At least I’ve always thought so.  But after some research, I’ve discovered that credit is not a mysterious number that changes on a whim.  You can control your credit score by doing a few simple things.

The most important thing you can do to get and keep a high credit score is to pay your bills on time.  Your payment history is a major factor in determining credit score, so don’t miss any payments.

Credit utilization is another determinate of your score.  If you have credit, use it.  But don’t use too much.  Using a high percentage of your available credit makes you appear financially unstable.  It can also lead to debt if you spend more than you can pay off.  Regularly using a smaller percentage of your available credit (less than 30%) and paying it off shows that you know how to use credit and builds  your score.

The length of your credit history is another factor to your credit score.  There’s not much you can do to change this other than continuing to use credit responsibly.  Time will take care of the rest.

None of that sounds very cool, but once you get the credit score you want the cool stuff starts happening.  You can buy things like houses and cars and get a good interest rate so you don’t end up spending quite so much.  Buying houses and cars helps build your credit–as long as you pay your bills on time.  That’s kinda cool, right?



  1. One of the best ways to use credit is to use it short-term instead of your actual money. If you have the self-control to pay the card off every month (week, whatever), it’s actually better to put all your expenditures on a credit card. First, because you can earn points, miles, or whatever, and second because you get purchase protection with a credit card, so if you have trouble returning something, you can always dispute the charge through your card company.

    1. That’s a really great point and how I would like to start using my credit cards in the future!

  2. I have to pipe in here and encourage the continues use of cash at small businesses. While most take cards gladly as a convenience, there are high fees for processing those cards, and paying cash means that all of your payment goes toward supporting that business, rather than to the banks and card processing companies. Our rates are higher when our average transaction is under $20, so for small purchases at small bsiness, think of the little guy and use cash!

    1. That is a REALLY good point. I know credit card companies can be a huge strain on small businesses.

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