Skip to main content

I’m 18 - Does my credit score affect my premiums?

At this point, what doesn’t?!

Okay, we’re off to a morbid start. But I’m just trying to keep it real. And in an effort to keep it real, I’m going to tell you a few things about your credit score so that you, yes you, at whatever age you are- wherever you are- know the whole deal about credit score and how it will affect you in more ways than one if you’re not being careful.

Start paying attention…

…at 18.

What? Who? That’s cra--

Except it isn’t.

At 18, chances are you’re only just starting off- probably still in college…still living with your parents or might even be just starting a new job. And as it goes, unless you have a guardian angel watching your every move 24/7, telling you what you ought to be doing every step of the way, you’re going to have to make peace with the fact that you’re pretty much on your own.

That isn’t always a bad thing. Wise up, take notes and make the right moves.

As much as credit score might be the furthest thing from your mind, it’s time to acknowledge one thing- your credit score is going to follow you everywhere. Getting a mortgage for a home? Yep. Getting a loan for your dream car? Yep yep. Getting your dream car insured? Yep yep yep.

So if there’s one thing you should know (at twenty) it is that the ubiquitous credit score will follow you every step of the way, wherever you will go.

That get your attention? Great. Let’s move on to…

…what is this credit score after all?

Your credit score is a score that basically tells you how high your chances of borrowing money and

returning it are. I’m not going to bore you with the details, but I’ll give you a basic idea- TransUnion,

Experian and Equifax are the three credit score reporters in America.

These guys will dig into all-and I do mean all- your borrowings be it a credit card loan or even a mortgage and use these figures to work out a value that ranges anywhere between 300-850. This value determines the possibility of you paying back your loans in time. You want a higher credit score; you always want a higher score.

Okay, great. Higher score. But how do I get it?

By being watchful

You heard me.

I’m going to elaborate.

  1. Scenario A: Let’s say you pay your credit card bills on time and never carry a balance- that’s great. Whatever the loan, as long as you’re paying it back on time, your credit score will only increase.

  2. Scenario B: Let’s say you have a credit card with a higher credit limit. I’m going to say about $110k. But you’re only using about $5-7k, you’re not utilizing too much of your available credit. That’s a good thing. You don’t want to give financial institutions the feeling you rely way too much on available credit to get by anyway. Use less; it’ll help strengthen your score.

  3. Scenario C: You’re going to start building your credit at some point in your early twenties. But it’s always recommended that the earlier you start opening accounts, the better your chances of strengthening your score.

  4. Scenario D: Getting a whole bunch of credit cards over a period of say 6 months is unwise. It might be tempting when you just start working- but stay away. You don’t need 3 or 4 credit cards. Financial companies will dig into your credit report to see if you’re eligible to get credit and this will only work against you. Start with 1- that’s all you need anyway.

Now all these factors come into play when it comes to determining your credit score. A lower credit score communicates your inability to make payments on time. So you see why auto insurance companies might be reluctant to cover you or charge a lower interest rate? Because you’re a risky candidate and covering you might end up being costly to them.

Moral of the story- keep your credit clean. If you’re worried about high insurance rates, feel reassured knowing insurance companies like The Hartford insurance offer a whole bunch of discounts to help bring down your rates. You’d be wise to find out about the different kinds of discount auto insurance companies offer when shopping for rates.

Ultimately, it’s all a question of keeping your credit score strong. Make timely payments, NEVER carry over a balance, and ALWAYS keep a close watch on your credit. You can actually do it for free by using Credit Karma to get your credit score. They also tell you how to optimize your credit score, so you can breathe easy knowing someone’s got your back after all.

Start early. Start at 18. Start!

Author Bio

Elvis Donnelly, a father of two who works from home. I am a voracious reader and like to keep abreast of current affairs on personal finance, technology and innovation. In my spare time, I love taking on home improvement projects and consider myself a closet chef.

All Rights Reserved. Elvis Donnelly is the original Author and is the authorized publisher of this content. Unauthorized republishing of this content will result in violation of Copyright laws. Doing the same may lead to the initiation of legal proceedings by the Author and/or Publisher.

However, you are allowed to like, tweet, share or promote the article link in your network without prior permission.


Popular posts from this blog

List Of Common Flowers in Kerala With Pictures

Kerala is one of the famous tourist spot situated on the south of India famous for its numerous wild life and thick vegetation. Like the Himalayan ranges on the north of India,

5 Common Examples Of Website Design Mistakes by Business Owners

This is a guest post by Sachin about five Common Examples Of Website Design Mistakes by Business Owners . When most business owners think about website design, they think about a brochure online. Online shopping sites are making a lot of money with the use of web-based applications to sell products, collect payments an arrange delivery. The only work left to do is pack and send the boxes. Smart applications can even print out the labels, so the only thing left to do it stick them on the box. Unfortunately, in many cases, websites are replacing people. For those of us left with a job, we can be thankful that many business owners make the following mistakes when it comes to websites and web design.

Don’t have one. This is the first and biggest problem of most business owners when it comes to website design. They think they don’t need one. Who can ever really do with less business? The reason why they have not been getting business from online sources in the past is because they have not …

About Web Offset Printing and Its Advantages

The sheer lion's share of business printing for inventories, magazines or books is on an offset printing press. There are numerous motivations to use web offset printing versus sheet encouraged and here are some for your thought as the advantages are numerous:

AMOLED display coming to Samsung Galaxy Tab range

This is a guest post by Erica about the arrival of AMOLED display to Samsung Galaxy Tab range.Samsung could be transplanting a seven inch AMOLED screen into an upcoming addition to its Galaxy Tab range of tablet computers.

You may have experienced an AMOLED display in a small portable device before as Samsung, Nokia and HTC have all used them in smartphones to date. However, the expense of producing AMOLED screens has prohibited them from appearing on larger devices like tablets, until now.

The seven inch Galaxy Tab was launched last year but an update with an AMOLED screen would be most welcome, cutting energy consumption and improving colours and contrast ratios across the board.

The rumours about this device state that it will run Android 3.0, feature a three megapixel camera on the rear, a two megapixel snapper on the front and have a display resolution of 1024x600 which is not bad for a device of this size.

The hardware powering the new Galaxy Tab will consist of a 1.2GHz processor w…

Building Blocks for Virtual Businesses : Key technological systems you must have to succeed in the remote business world

This is a guest post by Ripley Daniels about "Key technological systems you must have to succeed in the remote business world.

Whenever I tell friends I had a tough day at the office, they laugh at me. That's because they know I don't really have an office. I work very hard but I work for a company that is completely remote. Only a few of my co-workers ever go into an office at all and when they do, it's only for short periods of time. Our "office" is a virtual one. To us, the traditional office workplace is a thing of the past, alongside Tyrannosaurus Rex, the slide rule, and telephones where you stick your finger in a hole and turn a dial.
Unfortunately, none of this prevents me from having tough days. I still have them. But the reasons have nothing to do with the fact that my co-workers and I don't have a brick and mortar edifice that we can use to plan, strategize, hold our meetings, make presentations, discuss sensitive business topics, build relatio…

Is Windows To Go the Real Innovation of Windows 8?

Due to the buzz around the Windows 8 Consumer Preview, we've been treated to many variations on the pros and cons for tablets and desktops. However, the coverage tends to leave out what may be the single most useful feature of Microsoft's next-generation operating system: Windows To Go.

Essentially, Windows To Go puts a fully bootable Windows 8 installation on a USB drive. You'll carry around your OS and plug it into whatever device you need to use. If it's the first time you do so, the PC will configure all of the relevant device drivers, and store the necessary settings on the USB drive for next time. Unsurprisingly, Microsoft is marketing this feature toward enterprise customers who might otherwise question the need to upgrade.

Creating a Windows To Go drive wasn't one of the features available for hands-on testing via the Windows 8 Consumer Preview. Sean Gallagher of Ars Technica provided a way to 'build your own,' but admits that it's "a task …


Show more