Many factors are important to building wealth, but credit is one that people often overlook. And who can blame them? It\u2019s a seemingly boring topic based on metrics most of us don\u2019t know much about.\r\n\r\nWhat isn\u2019t boring, however, is buying your first home. Or driving your dream car off the lot. Or moving to a brand new city and being able to rent an apartment with ease. Whether we like it or not, these exciting life events take good credit. It literally pays to establish good credit.\r\n\r\nHealthy credit habits and healthy financial habits go hand in hand. If you're especially savvy, once you've established good credit, you can even use it to help build a fortune. Many wealth-minded folks know how to use credit to their advantage. While most of us see it as a hindrance, they make it work for them, using it to grow their net worth.\r\n\r\nHere are a few credit habits of the wealthy, and how you can make those habits work for you.\r\nThey Know How The System Works\r\nDonald Trump has famously filed for bankruptcy a handful of times, making many people wonder how he maintains his wealth. Interestingly, Trump has only ever filed for corporate bankruptcy, keeping his personal finances secure.\r\n\r\nHe learned an important credit lesson when he found himself in deep debt in the 90s, after a failed business venture--the construction of the Taj Mahal casino. Trump had personally invested in the expansion, and when he couldn't afford to pay the high interest, he nearly went personally bankrupt. After paying off $900 million in personal debt, he learned the important distinction between being personally involved and being involved as a corporation. Sure, he's had failed ventures even in recent years. But, because he's only invested as a business, his own net worth is protected.\r\n\r\nThe point is--wealthy people know how the system works and can navigate it in their favor. On a smaller level, if you want to build your credit, and make it work for you, you should probably know how credit scores work in the first place. Here\u2019s how your credit score is calculated, according to FICO:\r\n\r\nPhoto source: MyFico.com.\r\n\r\n \tPayment history: Your credit history makes up about 35 percent of your overall score. You want to make sure you pay credit cards and loan payments on time.\r\n \tAmounts owed: Thirty percent of your score is based on something called credit utilization. This is how much money you owe compared with how much credit you have available. The lower your credit utilization, the better. You want to owe as little as possible--ideally, you\u2019d owe nothing. Maxing out credit cards can have a huge, negative impact on this area of your score. \u2028Many people beef up their credit utilization by establishing high credit limits on multiple cards, but then they never use those cards. This keeps your credit utilization low and your credit score high.\r\n \tLength of credit history: This makes up 15 percent of your score. While that might not seem like much, it\u2019s why many experts advise you keep your oldest credit cards open, even if you\u2019ve paid them in full.\r\n \tNew credit: Opening too many accounts around the same time can have a negative impact on your score, according to FICO. This factor makes up 10 percent of your score.\r\n \tTypes of credit used: FICO says they consider the mix of credit you use--private loans, mortgages, credit cards, etc. This also accounts for 10 percent of your score.\r\n\r\nThey Know Where Their Finances Stand\r\nWealthy people keep tabs on every aspect of their finances, including their credit. When you know where you stand, you can use your financial strengths to your advantage and improve your financial weaknesses.\r\n\r\nIt\u2019s easy enough to get a copy of your credit report and find out your score. But surprisingly, only half of consumers know theirs, according to a study from the American Bankers Association. Keeping tabs on your score is important for a handful of reasons:\r\n\r\n \tYou can avoid any errors or mistakes, which can damage your credit\r\n \tYou know what to expect if you ever need to use your credit\r\n \tIt can serve as a gauge for your financial habits\r\n\r\nBasic Tips for Improving Your Credit\r\nOf course, knowing your score is one thing. Making sure it\u2019s high? Well, that takes a bit more effort. We\u2019ve already mentioned a couple of ways to build credit, but let\u2019s round them up, and add a few more:\r\n\r\n \tEstablish good credit history and make payments on time.\r\n \tKeep your credit utilization low.\r\n \tAvoid opening multiple lines of credit within the same time period.\r\n \tRather than move debt around, focus on paying it off.\r\n \tIf you have trouble paying off debt, contact the creditor and see if you can work on a repayment plan.\r\n\r\nWhere to Get Your Credit Report or Score\r\nEach year, you can get a free copy of your report at annualcreditreport.com. Many bank credit cards--WellsFargo, First National Bank and Discover, for example--also offer free credit information. Some banks will give you a copy of your report. Some will include your score on your monthly statements.\r\nThey Leverage Credit to Their Advantage\r\nWealthy people know how to use their resources to support their bottom line. And good credit can be a particularly useful resource. Many entrepreneurs have leveraged their credit to build a fortune. On a corporate scale, this is known as a leveraged buyout--companies are purchased with large amounts of borrowed money. The private equity firm KKR famously utilized this method when they took over RJR Nabisco in 1989--at a whopping $31 billion.\r\n\r\nAgree with this practice or not, many people use this same concept on a microcosmic level.\r\n\r\nWhen it comes to buying a home, some buyers opt to put down less than the traditional 20 percent, even when they can afford it. The reasoning is that, with good credit, they're approved for low mortgage interest rates. In fact, the rates are so low, borrowers would rather invest their money and earn a return, instead of putting it toward the purchase. They'd rather borrow money, paying little in interest, and invest the money they have, earning even more money.\r\n\r\nSimilarly, some savvy car buyers prefer to take out a loan, even when they can afford to pay for the vehicle in full. Again, they\u2019d rather invest the money they would have paid for the car, and get a return on it. In the end, they actually earn money from borrowing.\r\n\r\nObviously, this type of leverage comes with risk, and it isn\u2019t for everyone. But the point is: with good credit, you have these options. You can consider how you can make your credit work to your wealth-building advantage.\r\n\r\nEven if you choose not to go this route, you can still save money with good credit by qualifying for lower loan interest rates. When your credit history shows you\u2019re a responsible borrower, lenders are more likely to give you a low rate and work with you on closing costs and fees.\r\n\r\nYour credit history might seem meaningless. It might even seem designed to work against you. But when your credit is healthy, it can play a part in helping to build your wealth.\r\n\r\nAnother way to use good credit to your advantage is with credit card rewards. When you\u2019ve got an attractive score, you\u2019re eligible for cards that come with some pretty sweet perks.\r\nUsing Credit Card Rewards Responsibly\r\nIf you have good credit, you can use credit card rewards to earn hundreds of dollars of cash back throughout the year. Or, use them to pay for lavish vacations. Some people simply opt for gift cards. Whatever the reward, the idea is the same: you get freebies just for spending money. What\u2019s more, you build credit by using that card.\r\n\r\nOf course, this can be a dangerous game. It can lead to overspending. It can lead to debt. But wealth-minded people play it responsibly and reap the rewards without any repercussions. Here\u2019s how.\r\n\r\n \tNever pay interest: Pay your cards in full, preferably well before the due date. Set up automatic payments, and make sure you always have enough in your checking account to pay off your card.\r\n \tDraft a budget: Budgeting is key to making sure you don\u2019t overspend on your card. Only spend according to your budget. In fact, if you\u2019re prone to overspending, you might want to get that in check before you play the credit card rewards game.\r\n \tDon\u2019t open too many cards: Again, opening too many cards at once can damage your score. Keep this in mind when mulling over tempting credit card offers. Choose discerningly.\r\n \tBeware of fees: Some of these cards have such great programs, they come with annual fees. In some cases, the fee might be worth it. But that\u2019s something you\u2019ll have to calculate and decide on your own. Overall, though, you want to be aware of these fees. Make sure to read the fine print of any credit card offer.\r\n\r\nIn general, rewards cards can be a great way to earn extra cash and keep your score high. But this is only true when they\u2019re used responsibly.\r\nThey Foresee Risks to Their Credit\r\nOne difference between the rich and the wealthy? Wealthy people are less likely to lose their money. Part of that is being able to prepare for the future, and learning lessons from your past, like Trump.\r\n\r\nWealthy people develop awesome credit foresight. This means they know what events pose risk to your credit. It also means they're prepared for financial issues that may arise. You can develop foresight by adapting the following credit habits.\r\n\r\nCosign with caution: Some people will co-sign without giving it much thought, and this can lead to financial issues down the road. When you cosign a loan, understand that you\u2019re responsible for that line of credit. Proceed with caution.\r\n\r\nDon\u2019t let past debt come back to haunt you: Rome wasn\u2019t built in a day, and usually, neither is wealth. Some wealthy folks may have ugly credit pasts. But financially savvy people do their research and know how to deal with past debt so that it doesn\u2019t affect their future finances.\r\n\r\nReview your finances: Even if you regularly review your monthly budget, it\u2019s important to assess your annual spending. This can help you see how much your expenses add up over the course of a year, and adjust accordingly.\r\n\r\nBuild an emergency fund: When a financial emergency arises, many people find themselves desperate. They take out payday loans. They borrow from retirement. These decisions can lead to larger financial troubles and keep you caught in a debt trap. An emergency fund can prevent that from happening.\r\n\r\nBuilding wealth is about thinking long-term. It\u2019s about having full control of your finances. Sure, developing good credit habits might not seem like the most exciting jolt to your short-term financial picture. But poor credit gives creditors control over your money. Establishing good credit shifts that control to you and goes hand-in-hand with building wealth.\r\n\r\n Join to request professional help in managing your portfolio.