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One of the most common areas youll typically need credit is when youre applying for amortgageor auto loan.
But your credit score could also come in handy for more obscure things.
Heres what he said.
This means nows the time to start building credit, a task that can feel difficult to some.
As a young immigrant in this country, I often faced difficulties obtaining abank credit card, said Israilov.
Macys was kind enough to grant me my first credit card.
It immediately boosted my credit score, which eventually helped me get approved for credit cards issued by banks.
Sometimes, all it takes to start building credit is to get your first credit card or loan.
For some people, taking out student loans is enough to get them started.
For others, a retail credit card is the way to go.
Oftentimes, youll be approved if you have limited credit history or no credit score at all.
When you open a credit card with a retailer, youre adding to your credit mix.
You might not have to keep a balance on your card to establish credit.
However,some credit card issuerswill automatically close your account after an extended period of inactivity.
Just be sure to pay off the balance right away so you dont get hit with interest.
Payment history and credit utilization are two of the most important aspects of your credit score.
Its worth noting thatapplying for a store credit cardcould result in a hard credit check.
This could cause a slight drop in your existing score, if you have one.
Only hard inquiries within the past 12 months will count against you, however.
The same can also be said for other people with limited or spotty credit history.
But there are a few drawbacks to consider.
Failure to make on-time payments may harm your score.
Letting your balance get too high could also hurt your overall credit score as it increases your credit utilization.
Plus,store credit cardsgenerally come with their own annual percentage rate (APR).
The higher your APR and actual balance, the more you could be paying in interest.
On the other hand, responsible use can have some serious advantages.
For example, using theMacys Star Rewards cardlets you earn up to 30% off select purchases.
Other perks include a birthday surprise, member-exclusive deals and other ways to save.
This can lead to high interest charges, high credit utilization and unmanageable monthly payments.
attempt to view your credit card as an extension of your monthly income.
If you dont have the funds available in your account, dont charge your card.
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