Applying for credit is part of everyone’s financial journey in a number of different ways. If you want to start a business or buy your first property, credit will be unavoidable.

Before being approved for big ticket items like the aforementioned, lenders will want to see evidence that you’ve handled credit responsibly before. Things become a little tricky if you have no prior history with credit.

That’s why it’s important to start building up a positive credit score now. There are two ways to do this. There is smart credit and not-so-smart credit.

One way you could do this is by using a credit card. Making small purchases regularly, and – more importantly – always paying your statement on time, can help build up your credit score. Used responsibly, it shows lenders that you can handle debt well. This is smart credit.

Getting a credit card and maxing it monthly and only paying minimum due is not so smart credit.

Establishing a positive credit history can improve your chances of getting that home loan finance in the future. A higher credit score could also get you a better interest rate and lower your debt repayment in the long run.

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