When you want to buy a home, a car, or even finance your education, the only setback might be bad credit. This reason is why getting good credit is imperative; great credit is even better. Every step you take that involves credit from your very first credit card is essential. You can’t build great credit overnight, and while it is never too early to start working on your credit, it’s not too late either. Great credit will come in handy when you need that loan from Denver credit union to buy a home. Below are some tips on how to establish great credit; let’s take a look.

Only Borrow What You Can Afford

Most people think a credit card permits them to buy what they can’t afford, but that’s not always the case. You will find yourself knee-deep into debt and in lots of credit trouble. Ensure you only charge what you can afford to your credit card; this informs creditors like Denver credit union that you’re responsible. When you show discipline by only borrowing what you know you can repay, finding new credit would be easy.

Use A Small Percentage Of Your Available Credit

When you max out on your credit card all the time or close to the limit, it is seen as irresponsible. It gets even worse if you don’t plan to pay the total balance off within the month. Lenders like Denver credit union are aware that you’re sure to have difficulty repaying the amount borrowed when you max out your card. This action also hurts your credit score. However, when you keep your balance at a small percentage close to your credit limit, you’re sure to build great credit.

Start With A Single Credit Card

Once you get your first credit card, the temptation to accumulate a collection sets in. However, this is a mistake you should avoid if you’re trying to build up great credit. The more credit you have available, the more you will use, and it would be challenging to keep up with balances and payments. Another thing is inquiries made before a new credit card is given out; credit inquiries could hurt your credit score. When you get a new credit card, it also lowers your credit age, so be responsible when applying for new cards.

Keep your Old Credit Lines Open

When your credit line is old, it improves your credit score. For this reason, you should leave your most aged credit accounts open so they can build you great credit. Although a closed account doesn’t disappear from your credit report immediately, the bureau will eventually drop it.