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tips to improve your credit

Updated on June 25, 2011

building credit is easy

Learn to make your money work for you!
Learn to make your money work for you!

The secrets of a wise old man.

I tell you what I could write a book on how banks are taking advantage of consumers, I considered doing that but instead I'm just gonna offer a few tips that will help anyone build credit and learn how to make their money work for them.

Tip #1 - Pay Cash for everything you can - If you can't pay cash money for it and own it then ask yourself do I really need this?

What is the advantage of paying cash you ask? simple - Banks or Lenders want you to borrow money that you can't afford to pay back so they can keep you indebted to them and paying them money for years and possibly if you get behind on a payment they can take the item from you and you lose all the money you have paid on down payment & payments etc.

Anytime you are late on a payment IT HURTS YOUR CREDIT.

Tip #2 - If you have to borrow money - shop around & get the best rate for yourself.

How do I do that you may ask? when I say shop around that is exactly what I mean go to different banks and lenders before you make the purchase and see who gives you the lowest interest to pay back, most people will just take whatever financing is put in front of them & trust me, THAT IS A HUGE MISTAKE- THAT CAN COST YOU THOUSANDS OF DOLLARS.

Tip #3 - Make sure before you borrow the money, that you can pay it back even if you lose your job or something else unexpected happens

This is a very powerful point, make sure you study this over & over until you really understand it, You have to start your credit sometime or another, when you do take out a loan always be prepared to pay back the money by having the amount of your 1st couple of loans in a interest bearing savings account, that way if you get laid off work or have an accident, then you can simply pull the money out of your savings and pay off the note.

In other words to build your credit take out 2 or 3 small loans and pay your payments on time every month just like clockwork and I would recommend even paying the 2nd and 3rd loan off early, just to help build your credit.

Tip #4 - Remember that many banks make the majority of their money off penalties they charge you if you are late or overdraw you checking account. Or off interest they charge you to borrow money.

Tip #5 - Don't get buried in credit card debt

I will tell you why, because credit cards are set up to charge you a huge amount of interest and if your principal gets to be say a few thousand dollars, when you make your monthly payment about 90% of it will be going to interest, especially if you run over your credit limit and they get to charge you all the different penalties with interest.

Tip #6 - If you can't earn more money, the other option is to cut back on how much you spend.

The majority of American people are in debt and spend more money than they make.

Learn to be frugal & save money, when you get enough saved up, you can live off the interest of your savings.

I need 20 people to help me reach my dream.


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  • manthy profile image

    Mark 6 years ago from Alabama,USA

    @jean2011 - Thanks for the votes up and comments - I appreciate you.

  • jean2011 profile image

    jean2011 6 years ago from Canada

    Very helpful tips! It's just too bad that many people are caught in the trap of living above their means, and so they end being slaves to banks. I have voted this hub useful.

  • AngelaKaelin profile image

    AngelaKaelin 6 years ago from New York

    Did you hear about the latest credit card interest rate? 79%! I was abused by a credit card company I had a low fixed of 6% rate with. I opened the account in 1985. Nobody had ever heard of an APR back then and the highest interest I had ever heard of then was 8 or 9%. That was considered usurious. Then a few years ago, this same company started jacking up my fixed rate and sending me threatening letters. I've never been late on a payment - I actually never used them all that much except when I traveled - and those days are long gone thanks to the TSA, but that's another story. I kicked those b*stards to the curb and if I get the chance I'd like to see some of those people sitting behind bars where they belong. They are the worst kind of thieves and criminals. Nice hub, by the way!