Don’t Load Up on Debt to Build Credit – NerdWallet.com

Building your credit can unlock possibilities and save you money. It’ll help you qualify for loans and credit cards at lower interest rates, and you might get a break on your car insurance rate or avoid deposits on utilities.

But be strategic about the approach you pick. Taking on high-cost debt to improve your credit can leave you in a worse place than where you started.

“Don’t rush into it, as eager as you might be to build credit,” says Chris Dlugozima, education specialist at GreenPath Financial Wellness, a nonprofit credit counseling agency.

He suggests you have a stable income, a realistic budget and at least a small amount in savings. That helps to keep your cash flow steady and counter any emergency that might pop up, so you don’t miss any payments.

“If you don’t have the foundation in place, you might end up doing more damage than you intended,” Dlugozima says.

See the full article on Nerdwallet.com.