Redwood Credit Union

AS A YOUNG ADULT We want you to study smart, bank smart and start smart – that's why we oˆer the Start Smart account, to give you the banking tools and guidance you need from a local partner you can trust. If you're between the ages of 18-24, our Start Smart account oˆers a debit card with a free rewards program, free overdraft protection and no monthly fees or balance requirements. If you've already begun the task of building credit in your youth, now it's time to step up your game. Taking out a loan to purchase a car is a very common event at this point in your life. As with a credit card, take care to make every payment in full and on time. When selecting a car, choose one that you can easily aˆord. There's time later to buy your dream car. Right now, you just need reliable transportation that won't break the bank. If you're using your parents' credit card, it may be time to apply for a card on your own. Watch your timing, though. Don't apply for a car loan and a credit card too close together. Multiple queries into your credit history in a short span of time can lower your credit rating. Also, avoid credit cards that charge a lot of fees, like annual fees. That's money you can put to better use. If you've begun to pay oˆ student debt, the same rules apply: Make every payment in full and on time. This will demonstrate that you're conscientious about paying oˆ your debt. YOUR MIDDLE YEARS Many people purchase their first home in their 30s. A mortgage, an auto loan and your school debt are all forms of installment debt. Your credit card is revolving debt. Diˆerent kinds of debt help strengthen your credit history by demonstrating that you can handle various forms of debt. By your mid-30s, you've purchased one or more cars, you may have bought a house, you have one or more credit cards and you're well on your way to paying oˆ those student loans. There's still more work to be done. You'll want to take a look at your credit utilization ratio. That's the ratio of how much credit you have compared to how much of that credit you're using. Your goal is to use no more than 30 percent of your available credit. One way to boost your credit utilization ratio is to get more credit, but avoid the temptation to apply for more credit cards. Instead, request a credit limit increase on your existing card(s). For the same reason, don't cancel any credit cards if you don't have to. One of the variables in calculating your credit rating is the length of your relationships with your lenders. Credit you've had a long time helps your score. If you must cancel one or more cards, cancel the newest cards and the cards that charge a lot of fees. Check your credit report annually and challenge any discrepancies you find. And – as always – make all your payments in full and on time for a strong credit rating. Avoid borrowing more than you can repay. A bankruptcy or foreclosure will damage your credit rating for a long time.

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