If you are attempting to build credit there are many
strategies we can look at to help you get started. Credit building is significant
if you have no credit, bad credit or good credit because regardless of your
situation, you do not want to go down.
Apply for a Credit Card or Personal Loan
If you do not have any credit at all, you will need to start
somewhere. One credit building strategy is to apply for a credit card or a
personal loan and ask your family members or friends to co-sign the
application.
Once you have opened an account, make sure you meet all
monthly obligations, since if you miss any payments at all your co-signer is
responsible. If you do not have a credit history, you might want to choose for
credit cards issued by gas stations, or else open an account with a department
store.
These cards are relatively easy to get hold of, and it helps
you in credit building. After you established some line of credit, make your
payments faithfully and after about six months you will be entitled to more
credit.
It is not recommended, but if you have a personal loan and
still paying after six months, you might want to take out a loan to repay this
loan and start payment on the other loan. Never take out more than you need
when applying for a loan and always check the interest rates and upfront fees
to avoid overpaying.
Bad Credit Repair Strategy
If you have bad credit and want to restore or build your
credit, you must first start by sending for copies of your credit reports. The
reports are free once per year and can be obtained by TransUnion, Equifax and
Experian.
After you have reviewed your reports make sure no activities
are listed against you that is not your own. If you notice, any actions on your
report instantly write the three bureaus and ask for an investigation.
Once you have disputed your report, the next step is
knocking down each account until your credit is clear. You might want to knock
out the secured debts first and then work through the unsecured debts if you
are struggling with money. It may take some time but you will see results after
your debts are paid in full.
Open Bank Account
Another credit building strategy is to open checking and
savings accounts. Having these bank accounts establishes you as part of the
financial mainstream. Lenders want to know you have a checking account
available to pay bills, and a savings account indicates you're putting aside
something for the future.
Opening bank accounts is something you can do even if you're
too young to establish credit in your own name. Until you're 18, you can't
legally be held to a contract, so any credit you get will have to be through an
adult.
Either someone who co-signs a loan for you adds you to their
credit cards or opens a joint account with you. Having bank accounts, though,
gets you started on the right path and gives you practice in managing your
money.
Save Money
A great credit building strategy for those of us in debt is
to save money each month and apply it to our dues. If you are spending money,
for entertainment give it up for now and get out of debt.
Many things in life are free of charge and often fun and
exciting. Remember when you make sacrifices something rewarding always returns.
Pulling Out All Your Resources
Another helpful credit building strategy is pulling out all
your resources. If you have skills, you might want to open a small business and
use those skills to the fullest. You will make money and build your credit. Killing
many birds with one stone is the saying that works best when you learn what it
means.
It is also wise to cut back on expenses when you owe are
your credit is bad. If you are spending money you do not have, it is only
sending you backwards. There are many strategies for getting back on your feet
again. One great strategy is to avoid missing car payments.
Good Credit Scores
Finally, if you have a good credit score you want to plan to
maintain this score or else raise the score. If your credit is good, you want
to continue the budget that is obviously working and work toward increasing
your income to make sure you meet all payments each month.
The last thing you need to do is apply for additional lines
of credit if you already have credit established. Payoff what you owe now and
buy what you want later. One of the biggest mistakes many of us make is taking
for granted our situation.
If we have a lot of money and a great line of credit, we
often go on spending binges. This is ludicrous and is a defected strategy that
buries us in quicksand.
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