It’s a statistical fast millennials have the lowest credit scores in the United States, second to that are folks above the age of 30. Without a doubt this is influenced by the lack of a long credit history that older people have. It also a fact young people are increasingly turning away from credit cards. This is definitely not good for youngsters in the long run, here’s why:

If you want to win in the game of credit you need to know the rules. First of all credit scores come from one source and one source only. FAIR ISAAC CORPORATION, INC. an institution that was founded by Bill Fair and Earl Isaac in 1956. The FICO score was designed to measure a consumers credit risk, and has become a fixture of consumer lending in the United States.

So what that means is that FICO is the god head of credit and if you want to build your credit during this short time we have in life you need to know PRECISLEY how fico calculates your credit report. You might consider the credit system and banks as these evil entities that want to keep poor folks in poverty. You may consider credit cards as a debt trap however that’s not entirely true. Infact there are many people that I have taken from horrible credit to nearly perfect credit by sharing with them the credit knowledge I have so they can grow their credit fast.

If you have no credit score, you will never get any loans, its as simple as that. Maybe you don’t want to borrow money now, but think about the future when you need to purchase a vehicle, or get a mortgage for your first home, you will need that a good credit score. You even need a good credit score to avoid a deposit on a cellphone plan just as you will need a good credit score to rent an apartment. If you have bad credit now I know it can be discouraging and seem like its impossible to build but I have good news for you. You can play the bankers at their own game, and get great credit for yourself! Now in order to do that you must know how fico scores are calculated and what you need on your credit report in order to achieve the highest score possible.

Heres a chart that illustrates how you fico score is calculated:

You got to play by the rules (even when it feels you are actually cheating the bank), open up credit cards every year, always pay on time, and the bank will be your best friend until the end of time even if you try to squeeze every penny of interest and bonuses out of the bank. The Bank is going to increase credit limits, your credit score will increase, and while that happens your credit risk will lower and more lenders will give you loans at lower interest that will help prepare you to get the best interest rate for an auto loan or mortgage in the future.You will also be able to access some credit cards with pretty cool rewards and perks, like frequent flier miles, hotel points, or get a credit card that gives you a large sign up bonus or airport lounge access. Eventually you will be able to travel the world for free if you play your cards right, in this case we are talking about your credit cards.