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Credit 101

Good credit can help you obtain a car or home loan, a lease on rental property, and in some cases, a desirable job. Here’s what you need to know and do to make sure you’re creditworthy.

Two important indicators of your creditworthiness are your credit report and FICO score. Lenders evaluate both to decide whether or not to lend you money.

A solid history of paying back loans means more favorable loan terms (lower interest rate) and availability of future credit. Poor credit history means less favorable terms (higher interest rate) and fewer options for future credit.

To establish credit: Open a checking or savings account. Maintain the account and budget carefully to avoid overdrafts. Keep your checking/savings account in good standing — your banking institution may be the first entity willing to lend you money.

Look for opportunities for small accounts of credit:
• “Secured” credit card from your bank or credit union
• Department store credit card
• Gas station credit card

Jennifer Schurke
[Photo: Stetson University]
Jennifer Schurke
2010 Stetson University Graduate and Paralegal,
PCT Law Group, Jacksonville
"I had a 770 credit score when I went to rent my first house, and they waived the $150 fee to set up my electricity. That was my first time being thankful and aware of how much the advice helped me. It was awesome too, because it taught me good habits. I recommend it to anyone I know."

You’ll want to verify that the card issuer reports your activity and timely payments to the three credit reporting agencies to ensure you are truly establishing a credit history.

Being responsible with small loans will open up more doors to larger loans down the road. As you become more established, you will notice more credit card offers. Beware of the temptation to snag additional credit, and shred offers that arrive in the mail to avoid identity theft.

Good financial habits pay off.

    When Jennifer Schurke attended a business class her freshman year at Stetson University in DeLand, she was surprised when her professor encouraged them to apply for credit cards.

    “He advised us to get as many credit cards as we could manage with the best rewards — air miles, cash back, etc. — and to pay them off in full every month,” says Jennifer.

    She took his advice. By the time she completed her degree in 2010, Jennifer had built a strong credit score. As she stepped out on her own for the first time, she saw the benefits.

    Jennifer admits it has been tempting at times to stretch out her debt, but she is thankful she is staying on track to keep her finances strong.