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• Speaking of unintended consequences, however, remember that even though having at least one credit card or loan in your own name can help you build a strong credit history, it's important to carefully manage all credit accounts on which you're named - whether as an individual, cosigner or authorized user - to prevent damage to your credit score.
• Having a poor credit score can cost a small fortune over a lifetime. You'll pay higher rates and have a harder time qualifying for mortgages, car loans and credit cards. To maintain - or improve - your credit score:
• • Always pay all bills on time.
• • Never exceed credit limits.
• • Try to keep your credit utilization ratio (the percentage of available credit you're using) below 30 percent.
• • Don't automatically close older, unused accounts; 15 percent of your score is based on credit history.
• • Each time you open a new account there's a slight impact on your score, so avoid doing so in the months before a major purchase like a home or car.
• Bottom line: Make sure you have credit in your own name, in case you ever need to open a new account based on your own credit history. Just make sure you don't overextend yourself or mismanage credit you currently have.
• Jason Alderman directs Visa's financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney
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