Whether your credit has suffered a recent blow or you’re just establishing yourself, a few simple steps can get you on track. Even if you have no credit at all, you have options. Good credit is important for loans, credit card approvals, and lower interest rates, so the sooner you can raise your scores, the sooner you can reap the benefits.
Build credit by getting a secured credit card, applying for a student credit card, or becoming an authorized user on an established account. You can also build credit by finding a cosigner for a car or credit-builder loan. Just be sure to keep up on loan payments and pay off your credit cards monthly. The details needed for success are in this article!
Build Your Credit the Right Way Starting Today!
Get a Secured Credit Card
Regardless of your credit history, getting a secured credit card is the simplest way to start building a good score. You’ll need to put down a deposit, which acts in place of existing credit and will determine your spending limit. Treat that deposit like real credit, using your card responsibly and paying off the “balance” each month, and you’ll be approved for an actual credit line in no time. Capital One and Citibank both offer secured credit cards without any annual fees.
Apply for a Student Credit Card
Another great way to start earning good credit is through student credit cards. Most college students qualify, and the credit is real, not secured, so you don’t need to put any money down. Some great choices that have no annual fees include:
- Discover – offers 2 percent cash back on restaurant and gas purchases and 1 percent on everything else. Plus, students receive $20 in credit for each year they maintain a 3.0 GPA.
- Capital One – also gives students 1 percent cash back on purchases. In addition, they will increase your credit line if you pay your balance on time for five consecutive months.
- Bank of America – offers students a few different credit card options. Choose between 2 percent cash back on groceries and 3 percent cash back on gas, travel rewards, or a low APR.
- Citibank – offers rewards points on all purchases, with double points earned on entertainment and dining, and a variable APR. They give you 2,500 rewards points just for signing up; you can redeem through thankyou.com.
Use your credit cards to pay rent, your monthly groceries, or some of your bills. The key is to spend only what you can pay off – and pay off your entire balance every month. The more responsible you are with your credit, the faster it will grow. Be aware that opening new credit card accounts may initially lower your credit rating, so don’t open several accounts at once.
Get Some Help
Another way to build your credit is to have a relative or close friend add you as an authorized cardholder on their credit card account. As an authorized user, you can make and pay off purchases that help to build your personal credit. You can also ask for someone with better credit to cosign on a card for you. Cosigners can also give you the credit boost you need for a car or credit-builder loan.
Be aware that you’re asking someone to put their credit on the line for you; if you aren’t responsible with their credit, you’ll affect their rating as well as yours. And it works both ways, so make sure only to work with people you trust: If they are the main account holder and they miss a payment, you’ll both receive negative ratings on your credit reports.
You don’t need a lot of credit to build toward a good score, but you do need to start somewhere. No matter how much work your credit needs, the sooner you can start building it, the better. Why not start today?
~Here’s to Your Success