Financial Milestones You Should Be Starting In Your Early 20s

Increasing Credit Score

A good credit score makes your life easier. It allows you to qualify for low-interest credit cards, car loans, and is also important in the long term for purchasing a home. When trying to increase your credit score, above all else, only charge what you can afford. Banks like to work with individuals with low credit-card balances. Also, never take a car or mortgage loan that is too expensive relative to your income. Another key factor is keeping credit-card balances below thirty percent of your total credit line, though it is even better to keep the balances at zero as much as possible, and as a rule, to avoid hurting your score, never go above fifty percent. It also helps to limit the number of credit cards in your wallet. One or two is enough, and more than that hurts your score. If you make paying your credit cards off every month a habit, your credit score will rise fast. It will also rise when you make all your payments on time. When delinquencies are reported, your score sinks fast. Also, if you have a credit-card balance, always pay more than the minimum. It may be impossible to pay off debt all at once, but when you pay more than the minimum, you save on interest and help your credit score at the same time. Lastly, let your accounts age. The more older credit accounts you have, the better your score.

Continue reading to learn why life insurance is so important.