If you’re a recent medical school graduate, there’s a good chance you’re swimming in debt. At this point in your life and your career, it’s extremely important to establish and maintain good credit history. This will determine your ability to rent an apartment, buy a home or a vehicle, and more. Here are five things you need to know now.
1. Figure out where you stand.
If you aren’t aware of your credit score, find out now. You can access your credit report by visiting Annual Credit Report, Credit Karma, or Credit Sesame. Make sure everything on your report is accurate, because errors can happen, and they need to be corrected immediately.
2. Build your credit history.
Your credit history is a key factor in your credit score, the three-digit number that directly impacts the rate you pay on everything from mortgages to auto insurance. It’s best to build your credit history while you’re young, and the best way to start is with a credit card. If you don’t have a credit card, the system has no way to assess your creditworthiness.
3. Research credit card options.
Thoroughly research credit card options before you decide on one. Low interest rate cards, cash back cards, gas cards, and department store cards are usually easy to acquire. If you have a damaged credit score, you might need to resort to something else. Secured credit cards work just like regular credit cards, but you have to place a security deposit with the card issuer to obtain one. They usually require $200 or more for the deposit, which becomes the credit line for the account.
4. Be responsible with your credit.
If you want to keep your credit score high, spend within your means. Don’t use more than 30% of your available credit, and pay off balances in full each month. Your payment history contributes to 35% of your credit score, so don’t fall behind.
5. Start paying off your student loans.
Student loans are taken into account as part of your credit score, since they’re a form of debt. While you might be worried about a lender seeing all of this debt, there’s no need to be concerned if you’re handling your finances properly. Just be sure you’re making your payments on time, every time.