Keeping your credit profile in tip-top shape will help you secure good credit ratings for your future loans and mortgages. You have to prove your trustworthiness to creditors by showing them that you pay for the things you buy. The only way to start building your credit profile is to start buying on credit.
Building credit is all about creating a positive credit history. The following are some tips and guidelines to help you build your credit rating, avoid bad credit habits, and to reduce the need for credit repair services in the future.
Build Your Credit Rating
There’s no other way to build your credit rating than to start buying things with credit. You can start the process today, with your credit rating in mind, and these tips to get you through.
- Open a couple of credit cards – open credit cards that you can use for “needs based” items and one that you can use for things that you traditionally paid cash for. Buy things you can afford, get the credit card bill, and pay it off.
- Get secured credit cards – secured credit cards are those that require a cash deposit to act as security and at the same time, your credit line for that account.
- Get added to a close friend or family member’s card as an authorized user – this allows you to piggyback on someone else’s credit – someone who hopefully has a good credit.
- Be prepared to pay higher rates and fees – the reason for this is because you do not have a track record yet so your creditor still has no way to determine how your credit will fair.
- Budget wisely – have a budget and stick to it.
- Pay on time – avoid negative items on your credit report. Pay your credit card bill as soon as you receive it, and establish yourself as a “good payer” early on. Don’t have time to do regular payment? Don’t worry – you can always set things up on auto payment plans.
- Stay employed – Credit companies don’t usually stop at looking just at your credit history, but will also look at your employment background. If you can’t consistently keep a job, this may raise red flags in the rating process. When you stay employed and have a consistent and continuous revenue stream, you stay credit-worthy.
- Stay in one place – part of rated as less risky is being consistent, not only in your job, but also in the place that you live. Living in one place allows you to set up roots and habits that help in playing down your risk, again helping to build your credit.
Good to Better Credit
- Have the right mix of credit – A couple credit cards or a loan or two will suffice. Stay away from too many short term finance accounts as they are not indications of a promising credit.
- Increase your available credit – every 3 to 6 months, talk to your creditor to apply for an increase in credit limit.
- Accounts to your name – buy, pay, and transact in accounts under your name. Have more than one bank account and strive to maintain that they always have funds. The point is to show, on paper, the habits that lend to your creditworthiness.
- Use plastic – Have a credit card, preferably with one of the major credit card companies. Having a credit card with Visa, MasterCard, American Express, and the like will help you improve your credit rating over a shorter period of time.
- Pay it off – Use your credit cards wisely. Make it a habit to not just make the minimum payment required on your bill but to actually and prudently pay off your debt. Avoid reaching your credit limit, too. You don’t want to be deep into debt you don’t know if you can pay off.
Keep your good credit
In general, be consistent in what you do and how you do it. Start by opening a line of credit while continuing to develop good spending habits. Live within your means, and pay off your debt as soon as you can. When you prioritize your financial health and security, you are building your credit profile. Your habits today are the backbone of your good credit ratings in the future.
Have someone help you with repairing your credit. The Credit Repairmen is happy to know your needs and assist you in building a good credit profile. Contact us today!