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Tips for Building Your Credit HistoryTo receive a credit score, one must first have credit. Credit cards, bank loans, lines of credit, car loans - they all help establish a picture of credit that leads to a credit score. The higher the score, the better chance one has of getting decent interest rates.
Open a Checking or Savings Account
There are many things a person can do in order to establish a credit rating. Start by creating a checking and savings account. Use the checking account for most everything. But, make sure you have enough money to cover the checks, as bounced checks will count against you as well. Do not apply for a loan for at least a year after establishing the checking and savings accounts. It can take that long for information to filter into the different reporting agencies.
Keep Working
Another way to improve your credit rating is to stick with a job for as long as possible. Job-hopping can be detrimental to your credit report. If you have been in a job for less than two years, a financial institution looking at your credit report will want to see that you were employed before that. The longer you have been with a job, the better off you are.
Home Sweet Home
Stay in your home to improve your credit. Obviously, landlord changes, building sales, and similar transactions can force you out onto the streets. Keep records of this type of activity. If you own a home, try not to move for at least seven years. A stable residence counts for a lot on a credit report. If you move every year or so, it may appear to a financial institution that you are not financially stable. It can appear as though you move to avoid bills or rental payments.
Limit Credit Card Applications
Apply for one or two credit cards in a year’s span, never go higher, in order to keep your credit rating looking good. A huge flurry of credit card applications can appear negatively on your credit report. If you lack solid credit, avoid firms that offer credit reports to those that cater to people with bad credit. The interest rates and yearly fees are appalling and can actually put you into debt very quickly.
Keep Your Chin Up
Do not get frustrated when you are first turned down for loans. Those with little or no credit history will often be denied. Usually, store charge cards such as Sears, JC Penney, and Kohl’s are less strict than major credit card corporations. Make small purchases and pay them off over a few months. Doing so helps you to create a credit history.
Check on Your Reports
Check your credit report to make sure your social security number, name, address, employment, and credit information is correct. Having incorrect information can actually be detrimental to your credit score.
Be proactive when building your credit report. You want the information to demonstrate how trustworthy you are, not how quickly you can put yourself in to debt.
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I am a New Yorker that loves to write about all kinds of subjects. It is great to have forums like this, so I can really write, and write about things I love.
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