It’s important to maintain a good credit score to qualify for loans and mortgages. It could even land you your dream job down the line.
This is fairly easy to do if you’re consistent with your payments and you don’t stay in debt for long periods of time.
One way you can build up your credit score is by applying for and using a credit card properly. But many people shy away from the idea of getting one because of a couple of misconceptions about it.
We’ve listed some of them below and corrected them to help you get a better understanding of credit works.
Myth #1 Getting a new credit card will lower your credit score
Nope. Opening a new credit account will not instantly lower your credit score. Your credit score depends on your payments and how well you stay on top of them.
Getting a new credit card could lower your credit score just because it’s another thing added to your plate. This could throw you off and make you miss your existing bills.
Getting a new credit card requires a lot of consideration. If you’re sure you’ll be able to make the payments, then by all means, get a new one.
Myth #2 A low credit score doesn’t really mean anything
It sure does. A lot rides on your credit score – like your chances of getting approved for loans. You’re not going to be lent a lot of money if the creditor sees that you’re not good for the debt.
Also, what you might not know is that some companies might want to see their potential employee’s credit report just to see how responsible the person is.
A good credit report implies that you handle your finances well and you’ve got your life together.