Personal Finance for Moms- Build your credit history

Building a credit history is an area with needs particular to women. If you don't work, don't carry credit cards, and/or if family assets are in your spouse's name, it can have a long-term impact on your credit score.

Lenders use your credit score to predict the risk of lending to you, meaning the score affects the interest rate at which you are able to borrow money.

I can hear you thinking... "I'm not in debt, I don't use credit, so who cares about my credit score??"

While this seems logical, the fact is that none of us knows what lies ahead. You may find yourself wanting to go back to school ten years from now and needing a student loan. You may want to buy a home without putting 100% down.

In addition, your credit score affects not only lending, but insurance rates as well. So your home, auto and life insurance rates can all be based, in part, on your credit score.

What can you do if your credit score leaves something to be desired?

Action Plan:
1. Review your credit report and correct any errors

(Hint: Don't use freecreditreport.com. It's not actually free.)

2. Ensure that some of your family's credit transactions are in your name, solely or as co-borrowers with your spouse. Your name should be on the checking and savings accounts, the home mortgage, and any credit cards.

3. If you don't have your name on any financial instruments, consider opening a credit card. Yes, I know this advice is contrary to all the financial advice that says "pay off your credit cards and close those accounts!" However, if you have the financial discipline to pay it off every month, I think it is perfectly OK to have a rewards-earning credit card and use it sparingly.

Stay tuned for more in this series on steps to take to ensure your financial security.

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