QOTW: What do you wish you'd known about building credit when you were just starting out?

QOTW: What do you wish you'd known about building credit when you were just starting out?
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Credit is complicated! Even seasoned credit builders often have questions about it, so it’s no wonder that credit newbies can feel overwhelmed and make (often significant) mistakes, like racking up a high utilization ratio or missing payments :sweat:

Maybe your parents talked to you about responsible credit card use at a young age, or maybe you didn’t realize you had a credit score until your first credit card application was rejected :no_entry_sign:

In any case, it’s unlikely that you started out with all the answers, and possible that you’ve learned some credit-related lessons the hard way.

:question: What do you wish you’d known about building credit when you first started out? :question:


I wish I’d known that good credit gives you incredible leverage. You don’t have to accept what the lender offers you – you can shop around and find the best rates and terms. For my first car loan, I just took what the dealer offered. I didn’t realize I could go to a bank or (better yet) a credit union and get much better rates.



I don’t remember asking a lot of questions (and definitely should have). My assumption was if I paid on time, everything would be fine.

I remember being alarmed when I got a letter saying a card issuer had raised my credit limit. My fear was it would be regarded exactly the same as having additional debt (because it gave me the capacity to take on debt). But I did not ask anyone if this was the case. I called the card issuer and said I wanted to keep my low limit.

And like @lweston, I didn’t shop for a loan the first time I got one (to buy a car), and I did all my banking, except that, at a credit union.


I wish I’d known more about what goes into a credit score. If I’d known about age of accounts and credit utilization, I would have resisted my instinct to “tidy up” my credit by closing older, little-used cards. (This was well before Marie Kondo, but tidying up in this case sparked no joy … just a credit score drop.)

It was just dumb luck that I didn’t cut my available credit too much, and that I was in a position to always pay balances in full. If I’d had balances I was carrying out of necessity, my utilization would have shot up … and my score would have shot down. Ugh.

Fortunately, my obsession with keeping things neat and ticking things off a to-do list meant I’d always paid on time. That good payment history protected my score enough that when I went to buy a car for a first time I got a decent interest rate.

This was back in the day when you couldn’t just find out your credit score unless the car dealer or the mortgage broker told you what it was. It was some big secret from the consumer. I’m glad that consumers can get their scores and scoring information so readily now! Information = financial power.


I wish I had known about keeping your credit cards open! I would continually pay off my credit cards and then close the accounts. My original Sears Credit Card would have been over 40 years old!


I wish I knew how hard it was to rebuild credit after it goes bad - I would have tried harder to make those payments on time!


I wish I would’ve known a few things about credit and credit scores. I wish I would’ve known that late payments are serious credit damaging things. I wish I would’ve known that to many hard inquiries lowers your score. I wish I would’ve known about only using 30% of your credit limit. And finally, I wish I would’ve known to eventually diversify my credit(ie: credit card, loan, car loan, etc). With all of the above in tact and no outstanding balances(as in debt)my credit would be in good shape. As it is, I’m low man on the totem pole so to speak.


The late payment thing is huge, and a lot of people don’t know that. If you grow up in a family that has to constantly juggle bills, skipping an occasional payment might be a survival tactic and you might not realize the potential repercussions it can have.


I wish I had known that there is a big difference in my FICO score and my mortgage score. It’s quite a let down to work so hard to get that FICO up and still be denied a mortgage. None of the lenders told me this, either.


That something that trips up a lot of people, @firemom31. Most mortgage lenders actually do use FICO scores, but they’re versions that are several generations older than most of the scores consumers see and that have been branded with other names by the credit bureaus (Equifax Beacon, Experian Fair Isaac Risk Model and TransUnion FICO Risk Score).

Because they’re using an older formula, mortgage scores can be quite different from the FICO 8, FICO 9 and Vantage scores provided elsewhere.

Here’s a great explanation from our own @Bev:


I wish I had known about NerdWallet (it didn’t exist yet, but that’s beside the point!)

The idea that we wield quite a lot of control over our credit situation beyond making payments on time (or not…) didn’t occur to me before resources like NerdWallet. Now I feel like I’m at the helm, instead of a spectator.


That is awesome to hear, @Winslow!


I wish it didn’t exist. This system runs peoples lives in some cases. We are more than just numbers. Cost of living hasn’t gone up and people are going broke just to survive and ending up homeless because a credit score determines if a renter or loan office will even acknowledge you. So many hard workers and nothing to show. I wish they would do away with this. One stupid mistake can determine a long hard road of a future.