The Best Ways to Build Credit If You Have None
When you are looking to make your financial future brighter, you must find smart ways to build credit. If you currently have little or no credit to speak of, you should follow some simple credit-building strategies to start yourself off on the right foot.
Seek Help From a Relative
The first thing you can do is gain authorized use of a relative’s credit card account. This method is especially useful if you are a student hoping to build credit. By having partial ownership of a relative’s account, you can benefit from their already established credit. Ensure that the relative you piggyback off of maintains responsible credit habits. This is always a good way to get acquainted with the responsibilities that come with having a credit card in your name.
Obtain Your Own Card
If you are able to show a credit card provider your proof of income, and if you meet the other necessary qualifications, then you should consider obtaining a card of your own. Make sure you carefully assess your options in terms of credit cards. Choose a card with low interest rates and a simple payment plan. If possible, go for a card that doesn’t come with annual fees. Student credit cards and credit cards offered by retail outlets are a good place to begin. They are typically designed to aid young individuals who are hoping to build credit.
Be a Responsible Credit Card Owner
Make careful use of your credit card. Now that you have a card, it’s your job to make sure your credit score reaches and remains at a respectable level. Try to use your card only when it is essential. Don’t go overboard and put yourself in a tight financial situation. In additional, be sure you make timely payments. It’s best to make these payments in full.
Keep Track of Other Bills
Make sure you pay your other regular bills, such as those for utilities, in a timely fashion. While responsible payments on your utility bills may not give your credit score a huge boost, neglecting these bills will certainly bring your score down. If any utility bills are in your name, it is vital that you keep an eye on those monthly payments.
Request a Report
If you aren’t having any luck building credit, review your credit report. In some cases, erroneously entered information, such as a misspelling of your name, could be impacting your credit. Request a report from one of the three major credit agencies, which are Equifax, Experian and TransUnion.
The Benefits
The financial world becomes a friendlier place once you build credit. Individuals with good credit reap many benefits, ranging from lower interest rates on credit cards and loans to even better deals on car insurance. In addition, some employers may want to sneak a peek at your credit score, and if you can show them favorable credit, they may view you as a reliable worker who maintains an organized personal life. So if you want to prove to the world that you’re capable of managing your financial situation, follow the simple, aforementioned strategies on how to build credit.