You are Your Credit Score

When I moved here to the land of milk and honey, first thing my dad did was added me as an extension to his credit card. This was not new to me as we had extensions to our mom’s back in the Philippines. The reason my dad had, though, was entirely foreign to me. Apparently, it was so that I can build my credit history. I didn’t know then, but the longer I live here in the great USA, the more I realize that that was probably one of the biggest and most important gifts/legacies that my father has given to me.

I heard recently on NPR that parents “sharing” their great credit scores to their kids sets them up for a better chance of building good credit histories, thus garnering better credit scores. I didn’t go to school here in America so I am not like most people here who get to build their credit when they apply for student loans. But, carefully, I made use of the boost from my dad. When I first moved in to an apartment, my father co-signed, since I was also just building an employment history. A year after, I was able to sign the contract on my own. I have very good habits to keep my finances at bay (and my good habits are probably not what banks want because they cannot make extra money off of me).

But, there’s so much about this whole credit score hoopla to learn. I found out that even if I pay my bills way before their due dates, those don’t make much of a difference because these bills are assets. I am in no position to lecture about debt to asset ratio but I learned that I had to have a loan (house, car) and assets (house, car) to even increase my buying power. Now, I have a house and a car on my name. I had no issues getting approved for credit before the house and the car, but I learned this weekend as we were buying TempurPedic mattress that with these two biggest assets, I was even getting approved for more.

At any rate, one’s financial health is really dependent on their habits in life. Obviously, parents can help. But also, going back to the basics of not spending more than you make. I was even told to use those free credit score checkers or websites every year, but not more than once a year. When I was young, we had this “Life’s Little Instruction Book” where I read an instruction: “Use your credit card for convenience, not for credit.” I have taken that to heart. And even more because I am such a rewards points junkie that I charge everything, but pay everything all at once. Here in the States, you are your credit score. I heard it would take about 10 years to straighten up a bad credit history. And in this land of milk and honey where consumerism is at its best, a good credit history is the ticket to savings from all the interest that we would have to pay with our sweats.