How To Build Good Credit

August 30, 2009 by Michael  
Filed under Free Debt & Credit Tips

In order to build good credit, there are certain steps you should take when just starting out. The first step you should always take is to get your current credit rating by requesting a report. You will not only be able to see where you currently stand, but you can also verify that no mistakes have been made against your credit by mistake. Most people are stunned when they learn how often this happens, whether it be by fraud or just plain old human error, you must check this first. The next step should be obtaining  some type of secured credit card or  maybe even a gas card or your favorite department stores sponsored card. Which ever one you choose, this is good method to begin with if you want to build good credit.

If you want to build good credit, you will want to open up a checking or savings account with either a bank or a credit union. This will go a long way to show that you are a responsible person with some stability in your life. Of course make sure you don’t start bouncing checks as that would definitely be detrimental to your building credit strategies.

Make sure you pay your bills on time.You need to do this for everything, not just credit cards and loans. Whether it be a cell phone, utilities, or even your friendly grocer down the street, leave nothing to chance. Peoples credit ratings will decrease for some of the smallest reasons, but the bottom line is, it’s your responsibility to know what will be on your report so keep it clean.

Another good technique to use if your trying to build good credit is the old piggy back method. If you can get someone to co-sign for a small loan for you who has already established good credit that would put you way ahead of the game. Again just make sure every payment is paid on time since not only will you hurt yourself with late payments, but that would  also hurt the co-signer.

To build credit and a strong  history please don’t open up to many accounts early on. Some people think if paying one credit card on time then paying seven cards promptly would be even better. I assure you that this is not the case. It takes time to build good credit and if you try and go to fast, that will only send red flags out to all the lenders.

Another thing you should be aware of if you want to build  good credit is your balances and your credit maximum. It’s never a good practice to max out your credit cards anytime whether your trying to build credit, or if you have already established a good credit history. As far as balances go, always try and keep them to a minimum. don’t believe the myth that you have to carry a balance on a card in order to build credit or to  keep your good credit score. This is simply not true.

So there you have it. These are the steps you would want to take when your trying to build a good credit history. Very basic, nothing tricky. Just stick to it and soon you would have established your own name as being credit worthy.

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