In this episode of Military to Millionaire, former marine David Pere talks about credit and how to build it the right way – especially while in the military.
The first thing you should do to build your credit is to get a free copy of your credit report from annualcreditreport.com. Go through it and find anything that isn’t accurate. Dispute errors as soon as possible. Be prepared to show documentation, if needed.
Overdue payments are the real thing standing between you and financial freedom. If you have overdue payments, do the work, and pay them off as soon as possible. Remember that if those accounts go to collections, your credit score will tank. It may be painful, but it’s less painful than having no credit when you want to buy something like a house. As long as you pay your bills within 90 days, you won’t get reported. Whichever card has the highest interest rate, pay off first.
Length of Credit History is Key
Your length of credit history and credit utilization also matter. Don’t close out your oldest account, even if you don’t use it anymore. An old credit card will maintain your long length of credit history and keep your credit score higher. As far as credit utilization, make sure you’re using the least percentage of your credit as possible. When you use a lesser percentage of your available credit, your credit score increases. A trick to doing this is increasing your limit and not using it.
Want to learn more about Pere? Check out the Military to Millionaire website, and connect with him on Instagram or Facebook. Subscribe to his YouTube channel here! Take a look at David’s book – The No B.S. Guide to Military Life here.
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