What Are The Best Ways To Build Good Credit?
What are the best ways to build credit?
Aside from the ovious paying of bills on time, it actually makes a great deal of sense to have a few credit cards that you charge everyday expenses to. As long as you pay the bill in full at the end of them month you'll incur no finance charges. This goes along way towards building your credit. Additionally there are companies like AMEX that offer many nice benefits for using their cards. Unfortunately, the way our credit rating system works, if you have a 300k mortgage and make the payment routinely but are barely scrapping by, you'll have better credit than the person who owes nothing and has 300k in the bank.
You have to owe money that you pay back on a regular basis to establish your credit. Credit cards, a car note, car insurance and a house note will all help to establish credit. It takes years of good credit to achieve a high credit score.
The main thing is do not miss a payment and do not spend over your ability to pay.
There is debate about canceling credit cards. I have one I do not use, they charge no fees, so I have not canceled it, because I do not know if it will harm my credit rating. The credit card companies say it will. The credit bureaus will not give you an answer. So if you do not plan on using a credit card, do not take it, unless there is some tremendous discount on the product if you agree to sign up for the card. In that case after you get the product and pay for it, put the card away or cut it in half.
It's not all that difficult. Get yourself a few credit cards, use them, and make your payments ON TIME. It's really that simple. Just don't fall into the trap of over-spending or letting your balances get too high. A car loan or lease is also a good place to start. If you always pay your rent, bills, and loans on time and avoid late fees, you will have good credit. It really is just that simple.
Always pay your bills early or on time. Keep only one or two credit cards. Pay cash when you can.
by blbhhdcn7 years ago
A friend of mine wants to know: How do you build credit if you don't have a credit history yet?
by PhoenixV5 years ago
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by Gary Anderson7 years ago
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by Davinagirl37 years ago
My husband and I are looking to buy a house in the upcoming year. We have run into some trouble looking for a lender because our credit is, for lack of a better term, crap! I am looking for ideas on how to...
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