Good credit matters when it comes to achieving major money goals, such as buying a car or purchasing a home. Your credit score is just one of several factors that influences whether you’re approved for credit and the interest rates you’ll pay. If building good credit in your 20s is a priority, creating a plan to organize your financial life is a first step in the right direction.

How to Organize Your Financial Life

Taking charge of your finances can be a little intimidating at first, but it’s worth the effort, and your good financial habits may pay dividends down the road.

The first article in our series about credit habits to adopt in your 20s, this checklist covers the basics of what you need to know to get your finances organized:

1. Keep Track of Bill Due Dates

Paying your bills on time each month is crucial to establishing good credit. Your payment history accounts for a significant part of your credit score and even one late payment can cause you to lose major points. Besides that, paying late can also trigger an expensive late fee.

The first thing you can do to organize your financial life is to know what you owe each month and when those payments are due. That might include things like your rent, utilities, student loan payments, credit card payments and insurance.

You could organize your bills the old-fashioned way, by penciling in the dates on a calendar. If you’re a typical tech-savvy 20-something, however, you may prefer setting up due date reminders through your online or mobile banking system or in your calendar app.

2. Automate Monthly Payments

Once you know what bills you have to pay each month and when they’re due, the next step is to create a system for paying them. There are a couple of ways you can approach this.

For example, you could pay bills the same day you receive them. Alternatively, you could wait until payday to cover the bills that you have coming up, or pay all of your bills at once at the beginning of the month. The key is to pick a strategy and be consistent.

If you don’t feel like sitting down and writing checks each month, automating your payments can save you time. Scheduling payments in advance can also help you avoid paying late, and your creditor may report your on-time payment history to the credit bureaus.

3. Simplify Your Accounts

When you’re in your 20s, there’s no need to over-complicate how you manage your money. If you’re trying to keep up with multiple checking accounts, for example, you could be putting yourself at risk of getting hit with an overdraft fee. Sticking with one checking account and one savings account may be the better choice if you’re trying to keep things simple.

22% of young Millennials and 18% of older Millennials don’t have any savings at all, according to a GoBankingRates study. 1

If you want to save more money, you can also set up automatic direct deposits to your savings account each payday. Having a little cash tucked away for emergencies can keep you from having to rely on a loan or credit card to cover the gap.

Surprisingly, 22% of young Millennials and 18% of older Millennials don’t have a savings account at all, according to a GoBankingRates study. If you fall into either age group, you may need to put opening a savings account on your “get organized” to-do list.

4. Check Your Credit Regularly

The information in your credit report shapes your credit score, but 20-somethings may not have been introduced to credit scores during their younger years. According to a 2016 VantageScore survey, only 57% of young adults reported obtaining a free copy of their credit report, while just 51% said they’d checked their credit score.

Reviewing your credit report can give you a better idea of what has been reported to the credit bureaus about your payment history. You can get one free copy of your credit report from Experian, TransUnion and Equifax once per year through

Other articles in this series include Build Your Budget and Track Expenses, Get to Know Your Credit Report, Be Selective About Credit Card Choices, and Protect Your Credit From Identity Theft


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