How To Get Good Credit
Learning how to get good credit is important, especially for those who have never developed their own credit history.Without a credit history behind you, getting a car loan, mortgage or unsecured credit card can be difficult.
Young people, students and women who have never had credit in their own name often face this difficulty.
Here are some effective steps to help you develop a good credit history:
How To Get Good Credit
Open a Bank Account
If you don't have a bank account, open one. You need a bank account to begin to establish your credibility and financial 'identity'. The best thing to do is open both checking and savings accounts. That way you are ready to begin saving, another important step in establishing yourself financially.
Apply for a Loan
Applying for a small loan or line of credit from your bank and making timely payments throughout the term of the loan is an excellent way to establish good credit. Try your local banks or credit unions first. If you already have an account with them, you may have a better chance of getting the loan.
Apply for a Credit Card
Another option to consider is to apply for a bank, department store or gas credit card. You may be required to apply for a secured credit card if you have no credit history. It's a good start in establishing good credit. Read more about secured credit cards here.
Reporting to the Major Credit Bureaus
Make sure the lending company you deal with reports to the 3 credit bureaus. You are looking at improving your credit report score and that will happen much faster if your positive progress is reported to each of the 3 major credit bureaus.
Charge Only What You Can Afford
Your goal is to develop good credit, so charging small amounts that you are able to make timely payments on or pay off every month is important. Don't get in over your head.
Make Your Payments On Time
One of the most important things to remember is to pay your bills on time. Write the payment due date on a calendar so you don't forget, or get into the habit of paying the bill as soon as it comes in. This step is really important! Late payments and missed payments immediately begin to put you on the road to a bad credit rating.
Find a Co-signer
If you are unable to get a loan or credit card on your own, find someone who will co-sign with you. Keep in mind that a co-signer is responsible for any unpaid balance you owe, so you must be prepared to make your monthly payments on time.
You must be at least 18 years old to get a credit card without a co-signer.
Keep Your Bank Account on the Plus Side
Keep track of your money and make sure you don't overdraw your checking account or bounce checks. Bouncing checks is one of the worst things you can do when you are trying to establish a healthy credit report score. It gives the impression that you can't manage your money and will be a poor credit risk.Credit Building
More About Credit Scores ...
With money in your pocket, you are wise and you are handsome and you sing well too.
~ Yiddish Proverb
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