Having a very nice credit history is actually the best step to take if you specifically decide to accumulate quite an amount of interest rates on each and every purchase been made. Although, it may be very contradicting on how you can be able to start building your credit once you start up with your own finance. Once you properly follow the guideline provided for you on this site, you can be able to build good credit.
Before you can be able to build good credit, you have to make sure that you don’t involve yourself in any kind of wrong information relating to your credit report. For example, if you have old debt collections or other unpaid bills hurting your score, it’s best to take care of these before you start trying to improve your credit score. You can find out if there are errors on your credit report by checking yours. If there is any kind of error, you just need to contact the credit bureaus so they can be able to remove inaccurate items from your credit report.
Giving the fact that there are different kinds of credit cards available to build good credit from the onset, the fact still remains that you’ll make a cash deposit to the creditor. One important factor is that once your credit history grows positively, you’ll probably receive better rate offers, meaning that you’ll have to pay low interest and earn good rewards when you decide to use a credit product. But you can still use quite some few different products you can use to repay whatsoever you owe.
The Best Ways to Build Good Credit
There are some methods you can be able to use to build good credit. Now read below and see some of the efficient ways to do so.
Apply for a secured credit card
Before you can be able to improve your credit score, you have to, first of all, make sure that you apply for a secured credit card. This is because this card has a cash deposit which is been associated with it. One thing about Secured credit cards is that they aren’t meant to be used forever. The purpose of a secured card is to qualify for a card without a deposit.
If you can be able to control your credit limit, then you’ll actually get approval easily on a secured credit card. If you have huge credit limits, then your credit score will specifically be boosted which will allow you to qualify for unsecured credit cards with high credit limits.
Don’t Misuse Your Credit Cards
Don’t get yourself confused by this one. When I talk of misuse, I’m practically stating “Using it too much”. If you have a credit card, you have to make sure that you don’t overuse it. This is because doing so will lead to you having a high credit utilization ratio. So if your credit utilization ratio is reaching climax, then you’re creating a future payment problem for yourself. This will specifically lead to unhealthy status to your credit score.
Become an authorized user on someone else’s credit card
Once you become an unauthorized user on the credit card of someone is it any of your family member or your friend, you’ll probably enjoy access to a credit card which will probably help you build your credit history. Being an authorized user means you have the ability to use a person’s credit card, but not the responsibility of making payments, and you aren’t legally obligated to pay for your charges.
Before you can be able to do this, you should come to an agreement on how you’ll use the card before you’re added as an authorized user. Once you’re an authorized user, the entire account history is added to your credit report and added into your credit score.
Reduce the Number of Opening New Accounts
This guideline is another important one you need to be mindful of. Once you apply and open a new account, you have to bear it in mind that your details do reflect it, such as your age. This is because your account age is another thing been considered in determining your credit score. New accounts bring down the average age of your overall credit accounts. So, therefore, having lots of newly opened accounts might indicate that you’re desperate for credit and might not have steady finances.
Avoid too many credit Cards in Possession
If you think that having too many credit cards will improve your credit score as quickly as possible, then you must be very joking. This is because having lots of credit cards won’t make your credit card to increase, but rather it will probably curse damage to your score in the short run. Not only that, taking on more credit cards than you can handle puts you at risk of late payments, which will also affect your credit score.
Ensure you Make Early Payments
This is one major factor that affects your credit score. This is because of the fact that payment history is the biggest factor influencing your credit score. Making full payments on time is the quickest way you can be able to build your credit. Once you have accounts of your own, paying on time is the best thing you can do to build a good credit score.
You can leave your Comment in the box below.