Trying to determine the best way to build a great credit history? Then this article has the solution to your situation. More specifically we’ll discuss how to start with a single credit account, use it regularly, and how to manage your credit to keep it in shape. After reading this article you should feel confident you can begin building your healthy credit rating on your own, right away.
Start with one type of credit
When first starting out it’s important you start with only one credit account. Don’t start applying for every card under the sun. Your best bet is to start with a credit card, department store card, or even a gas card. If you struggle to get approved for any of these types of credit accounts consider a secured Visa or Master card. Car loans whether a lease or financing, along with co-signing for other peoples loans will also help to build your positive credit history.
Use it regularly
Once you have a credit account be sure to use it regularly, but responsibly. Each month charge an amount you feel comfortable with to it. Consider switching some of your monthly expenses you’d normally pay cash with to using credit. Items like groceries, gas, or even your cell phone bill can all be paid with credit. At the end of each month pay off your account in full before your payment due date. Several months of this will build up your credit history, and prove that you can manage it effectively.
Manage your credit wisely
Managing your credit isn’t just about making sure you don’t over spend, and paying your bills off at the end of each month. It’s important that once you start building a good credit rating you request your credit report each year. Reviewing your credit report each year will ensure your credit score is healthy, and that no one is trying to request credit in your name.
Beyond checking your credit report each year, be sure to only have as much credit available as you can handle. Credit card companies will be more then happy to offer you high limits on most cards once they see how efficient you are at paying your account off. How ever these high limits can be a temptation to put yourself way into debt. Manage the number of credit accounts you have, and the limits of each account so you feel comfortable with the amount of available credit your have.