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Keep Your Credit in Shape, No Matter What Stage in Life

June 3, 2014
Credit Score
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Every stage of life brings its own set of ups and downs. When it comes to credit, this reality is especially glaring – there are a lot of opportunities to make mistakes!

Luckily, you have the Nerds in your corner to help you conquer any financial challenge. Take a look at the information below to learn how to keep your credit in good shape, no matter what your stage in life.

Young adulthood

The challenge: Building a score from scratch

At the beginning of your financial life, one of the biggest obstacles you’ll face is getting credit on decent terms. This is because you probably don’t have much of a credit history, so you’ll have to start building your score from the ground up.

Even though it might be tempting to ignore your credit, it’s important to take action right away. In a few short years, you’ll probably want to purchase a home, and you’ll need a robust credit score to do so.

Luckily, there are some easy steps you can take right now to ensure that you won’t be a credit amateur forever:

  • Get a credit card  – Using plastic consistently and responsibly (see below) is one of the easiest and fastest ways to build your credit. Over time, apply for credit line increases to improve your borrowing power.
  • Don’t succumb to the pressure to overspend – Getting a credit card to boost your score is only sensible if you pay your bill on time and in full. Your friends might be buying new furniture and expensive vacations with their cards, but don’t cave in to peer pressure to overspend. Getting into credit card debt will damage your credit score and cost you big bucks in interest.
  • Consider avoiding the bank of mom and dad – Your well-meaning parents might be willing to give you a loan to buy a car or other necessities when you’re just starting out. But consider going through a traditional lender instead; adding installment loans to your credit report will help boost your score.

Middle adulthood

The challenge: Keeping your credit solid in the face of multiple money demands

By now, you’re likely making a decent salary and building your net worth. But you probably also have a number of financial obligations: a mortgage, an auto loan, and perhaps kids or aging parents who need to be provided for. All of these responsibilities will place demands on your resources, so it’s important to avoid slipping into bad habits that will hurt your credit.


  • Set reminders to avoid paying bills late – Between work and home, your mind is probably in a lot of places. Don’t let your busy-ness get in the way of paying your bills on time, since this will have a very negative effect on your credit. Set calendar reminders on your phone to remind yourself to pay on time.
  • Budget carefully to dodge debt – Middle-class life has become increasingly expensive, which is why so many people slip into credit card debt. But using too much of your available credit will hurt your score. To avoid this, keep a budget and track your spending.
  • Keep an emergency fund – Many people with good credit assume they can just open a new card to cover an unexpected expense. But opening a bunch of new cards in a short period of time will cause your score to drop. Build and maintain an emergency fund so that you won’t have to opt for credit when faced with the unexpected.

Later adulthood

The challenge: Avoiding the debt trap

Planning for retirement is difficult, and a lot of people don’t put enough money aside. This has led to a huge jump in the debt load of senior citizens in recent years. But charging too much to your cards will cause your score to plummet. To keep your score sharp in your twilight years, you should think about:

  • Reassessing your spending plan – You’ve probably kept the same budget for years, but retirement is a good time to reevaluate your spending habits. Take a hard look at your income and monthly bills and restructure your spending plan accordingly; this will help you avoid sliding into credit card debt.
  • Downsizing – An easy way to reduce your monthly expenses is to move into a smaller place. This will keep you from charging up your card to bridge a resource gap.
  • Asking family for assistance – If you’re worried that you’re charging too much or forgetting to make payments, ask a trusted loved one for help; it’s common for older adults to have trouble with these tasks. This will ensure that you’re not inadvertently doing damage to your score.

The bottom line: Every stage of life presents us with a new set of credit challenges. Recognizing them and making a plan of action is the best way to keep your score healthy, no matter which phase of adulthood you’re in.

Stages of life image via Shutterstock