Unless you’re a millionaire, one day you’ll need a loan to buy something big like a car or a house. To do this, you’ll need a positive credit history.

Think you’re too young to worry about your credit history? Think again. The earlier you learn good credit habits, the better. Follow these tips:

Limit your credit

For many young people, the first type of credit you’ll have is a low-rate credit card. When you get your first credit card, use it cautiously. Remember, the primary reason for having a credit card is to establish a positive credit history.

This isn’t free money, you’ll have to pay it all back, plus interest.

Pay your bills on time

Most lenders charge a late fee when your payments aren’t made on time. This will cost you money and may even increase the amount you must pay on interest. Also, payments later than 30 days past due can adversely affect your credit history.

Avoid minimum payment temptation

When you receive your credit card statement, you’ll see two numbers that jump out at you: your balance and your minimum payment.

Pay the entire balance whenever possible. By only making the minimum payment, your interest charges will begin to add up, putting you into debt.

Good to know…
A credit history is basically a way for a lender to decide whether they can trust you to pay back the money you borrow from them.