Credit
Of the many definitions of "credit," one of the most important is "financial trustworthiness." Your credit record is the most important factor lenders consider when you apply to borrow money - for a car or house - or open a credit card account. Many lenders offer better terms and lower interest rates to consumers with good credit ratings. Building a good credit record is an important step in reaching financial independence and can be established by:
• Applying for and using a credit card for purchases

• Using a student loan for tuition and books

• Making at least the minimum payment due

• Paying all your debts on time


Take charge of your financial future now. The information, tools and resources on these pages are designed to help you create and maintain a lifetime of good credit.
• Control spending on your credit card. A good guideline is never to borrow more than 20% of your annual after-tax income. Never let your monthly debt payments exceed 10% of your monthly net income.

Already above the recommended debt guidelines? See which expenses you can cut. When you apply for credit, lenders carefully evaluate how much money you owe compared to your income.
• If you use a credit card, pay your bill on time. By paying at least the minimum amount due by the due date, you avoid a late fee and you prevent possible damage to your credit record. Similarly, avoid going over your limit. Are you not receiving your statements? Call your issuer to make sure your current address is being used.

• Are you considering using your credit card to get cash from an ATM? Taking a cash advance should be considered a last alternative. Cash advances typically start accruing finance charges from the day you take the cash from your credit line. And, you pay a fee for accessing the cash portion of your line.

• Often, your use of a credit card acts as your agreement to the credit card issuer’s terms and conditions. Read all the fine print associated with your account before you use the credit card. Using a credit card is your responsibility. How you manage it shows creditors how reliable you will be in paying all your obligations.