If you’re someone that has low or no credit and trying to figure out the order of building credit, here are a few tips. Some are pretty intuitive while others may not come to mind right away. However I truly feel if you practice these steps you’ll be in the right direction. Check them out!
Get A Secured Credit Card
If you are trying to establish credit you will be unable to get a credit card due to your low score, but you may be able to get a secured credit card in order to start the process. They function a lot like debit cards, or prepaid calling cards. You simply deposit a certain amount of money on the card, then spend it as you please. Making on time payments will be a good looking start for you and in time credit cards will come lining up.
Don’t Use Too Much Available Credit
Just because you have it does not mean that you have to use it. One factor in calculating your credit score comes down to what percentage of your available credit you are using. Try to keep that number as low as you can, which shows that you aren’t prone to spending sprees just because you can. Some people will say keep it at 50 percent but my advice I will say use up to only 30 percent.
Let’s Build A History
It’s important to have as long a history of credit as possible, so don’t go cancelling cards just because they’re a bit older. It’s important to hang onto them and use them from time to time.
We Don’t Make Any Mistakes
This should go without saying but it doesn’t hurt to see a reminder. Don’t make any mistakes life can be very fun when credit cards are feeling like free money but the reality is it’s not free. One of the most common mistakes that people make is being late on a payment. It’s not a bad idea to set up automatic payments for the minimum payment, which will ensure that you are never late. You can then come in at your leisure and make a larger payment, if you wish to do so. This is a great way to eliminate some of the risk of a simple mental error.
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