Daily Juice 051 – Money Moves in your 20s

Daily Juice 051 – Money Moves in your 20s

Tip 04: Begin building credit

Tip #4 Begin building credit

Credit is your ability to take on debt, while debt is the actual amount that you currently owe to creditors. In general, you are in a much better financial position if your available credit far exceeds your current level of debt. Credit is the ability to borrow money, while debt is the result.

For young adults in their 20s, credit cards and student loans are the most typical form of debt. Credit card itself represents the amount of credit you can borrow.

Do you have at least one credit card in place? I am not encouraging the use of credit cards, however when used wisely, paid off monthly, it can be a great tool.

This will help you establish a track record of making payments on time, not maximizing available credit and building a history.

Credit Reports give us a report card that is important to maintain and monitor if you plan to borrow funds in the future.

I strongly recommend for you to pull your credit report if you haven’t in the last 12 months. Sites such as creditkarma.com and myfico.com will provide your report. Also, each of the credit agencies: Equifax, Experian & TransUnion will provide you with a free report once a year.

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Anna Sergunina
Anna Sergunina

I passionately believe that in order to live a life of fulfillment and joy, we must genuinely serve each other in any way possible. I found my mission in life to serve others via financial planning. Anna regularly writes about personal finance. Her work appears on Business Insider, Nasdaq, Nerdwallet, among others. Anna is the creator of Money Flow system.

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