Understanding More about Credit As another year passes and another graduating class of future business administrators or healthcare professionals in Cheyenne receives their diplomas and enters the “real world”, the issue of smartly dealing with credit again surfaces. Credit card companies get excited with every new client that misunderstands credit or is ignorant of how credit works and how to properly build credit. Starter’s Guide to Credit As these young people venture into the work world and into the complications of credit, both good and bad, there are a few things that they should keep in mind. The first is the most basic fact of credit which is that credit and credit cards are loans that will need to be paid off before their due date or the penalty of interest will be applied. Too often, credit cards are seen by young people as a way to spend money they do not yet have. This is a dangerous and often debt incurring thought process that lands many people in financial trouble. Instead, credit cards should be thought of as the micro loans that they are. However, when used with care and with responsibility, credit cards and credit can be very beneficial to a person and, indeed, good credit is in fact a vital necessity of adulthood. There are many business students in Cheyenne who shy away from building good credit for a number of reasons, one of which will be discussed shorty, but this should not be so. Having a good credit history does far more than simply boost one’s credit limit or even increase the likelihood of receiving a loan, although the loan alone would be a good enough reason to maintain a good credit score. No, having good credit does far more than that. A good credit score can land people jobs, save money on phone plans, pay lower insurance premiums, and receive lower interest rates on large expenses such as a home loan. Benefits of a Good Credit Score With all the benefits of a good credit score, simply avoiding credit so that one does not have to worry about it is itself a critical mistake. Instead, a college grad should simply strive to better understand the intricacies of credit and build a quality credit score. As mentioned before, one of the main deterrents to building good credit is simply incurring credit in the first place. In many young minds, this is incorrectly translated as going into debt first before being able to achieve a good credit score, which understandable scares some away from striving to achieve a good credit score. A person can build a good credit score without ever going into debt if they will take the small steps of paying off their credit card every month without carrying a balance. By planning out purchases according to available finances, a person can build credit by paying for charges to the credit card while avoiding debt incurred from interest rates. While it is true that often some debt will be incurred, like when granted a home loan, the debt that has the ability to suffocate and drown a creditor can be avoided while still building a quality credit score. Simple budgeting and wise finances with paying off credits before they are due will go a long way in staving off debt while one builds their credit.