There are some tried and true ways to build your credit if you are just starting out. It is often in the early days of using credit that many younger people fall into trouble. The last thing any young man or woman or just married couple needs to do is ruin their credit rating before they even get started. Here are some tips that can help you build your credit and help you stay out of trouble.
All consumers, regardless of age, must know that living without credit these days can be hard. Homes, cars, college education all require the use of credit for most people. Without sources of credit many people simply would not be able to afford these things. Credit ratings are also used for other purposes as well, such as employment and security clearances. All in all, having a good credit record is a very valuable thing to have in this day and age.
There are actually many ways to establish your credit. Here are some tips that can help get you started:
You need to put your apartment and your utilities in your own name. If someone else, like mom or dad, have their names on these items they will get the credit boost, not you.
If you are working and can afford it, apply for some credit at a local store. The credit does not have to be large, and, in fact, it should be small enough that you can easily make the payments.
You can apply for credit with an oil or gasoline company as they often have lower criteria for giving credit. This can be a good way to get your foot in the door towards getting better credit cards later on.
Again, if you are working steadily and can afford it, apply for a small loan from your bank. If you get the loan, make sure that you pay each payment on time and in full. This will be a huge boost to your credit history.
You may want to apply for a secured credit card from your bank. These are credit cards that require you to put a certain amount of money into an account. Your credit limit on the card is equal to the amount of money you have in the account.
It is important that all of those creditors that you are working with report your payment history to the credit reporting agencies. This is normally done as a matter of course, but it is good to check on this every now and then just to be sure.
Once you have some accounts, it is vital that you make your payments on time and in full. This cannot be said enough as this is the leading cause for bad credit reports.
If you find that you simply cannot make a payment, contact the creditor as soon as possible and explain to them what the problem is. They will often work something out with you and if you can get the payment in quickly, they may not report the late payment to the reporting agencies.
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