Hi! I’m a 20-year-old college student who’s been studying in a major city for two years. I moved back home for the summer, and my parents, facing financial difficulties, have informed me they can no longer support my education. My school was already expensive, even with scholarships. I’ve been accepted into a prestigious study abroad program for the upcoming semester, which my parents previously encouraged me to pursue. I’m concerned about accumulating student loan debt if I fund my education myself. Additionally, I have no credit, and both of my parents refuse to co-sign for me, insisting the other should do it. I’m also struggling to find housing in my school city.
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When used sensibly, credit cards are a simple method to begin raising your credit score. Having a high credit score is essential if you ever want to apply for a good mortgage, auto loan, or anything else of that kind.
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This is the solution; nevertheless, exercise caution. Look for a card with a maximum limit of $1,000 to $1,500, ideally $1,000. Never charge more than 50% of your credit limit because doing so lowers your credit rating. Don’t charge anything you can’t afford to pay off when the bill arrives; instead, load the card with food and petrol and pay it off each month. If you do that, you will have created credit with a strong start within six months.
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There’s no justification for favoring the lower bound. if you make reasonable use of it. Your credit score should increase if you use less of your available credit.
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Young people just starting with credit may find it easy to fall into the credit card trap. If necessary, a card with a smaller balance will at least allow them to make a withdrawal. I would usually advise someone just getting started with credit to start with a modest limit.
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