How do you establish credit?
Preferably, how to improve credit score without the use of credit cards.
buying a car and keep up on the payments is a great way to improve your credit.
Generally just simply establishing any form of credit and paying it back in a timely manner.
There are a lot of things that go into your credit score. Having a large credit line that is not being utilized is actually a good thing. However, if you have a credit line with the majority of it being used then that is bad. It means you have a lot of debt out there.
If you want to lower your debt, payoff some of your debt, do not necessarily close accounts once they are paid off (credit cards) as this will lower your available credit, and do not default on any accounts. Building up your credit takes time.
When I first met my husband I didn't have much credit just because I really hadn't taken out any loans and didn't have credit cards. We got me a credit card that we paid on every month. When we went to buy new furniture, I got a small loan from my credit union (they have better rates), and then paid it off ahead of schedule. These things quickly built up my credit score.
If you have poor credit, it will take time to build it back up. That is because the credit bureaus keep certain information in there for a set period of time such as late payments or defaults. So keep up with your payments and pay down your debts. Also, be sure to check your credit rating every year (as it is free to do so) to make sure everything looks good.
Buy furniture from a local store and pay on time. Realize most of these pay here places don't report, so you will have to ask them to do so. If you have a year to pay it off, pay it off in 3 months. Best advice I can give you, is forget a credit card. If you can't afford it, save for it, then buy it. Credit card companies are legal loan sharks!
A while back, I heard about someone taking out a loan at a bank and then investing the proceeds in a CD. As soon as the CD matured, they paid off the loan in full. It cost them less than $50 in interest cost, and voila they had established a credit history. This would work best with someone very young.
Getting a personal or business loan is actually a very good strategy for improving your credit. Suspend usage of your present credit cards after you pay them off, and you'll see the FICO score shoot up in just a few months. http://pinstor.us/articles/10-best-cred … one-cards/
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