Your credit history plays an important role in your life. In most cases, it determines if you can land on a good job or get reasonable insurance rates. For those who are still starting out, knowing the right way to build a credit history is very important. There are things that you need to do.
- Examine your credit report – In creating the credit score of a person, credit reports are used. Lenders typically use this to determine the creditworthiness of a loan applicant, although for people with bad credit that need a little more help with this, there are sites that offer loans even with low credit scores which work perfect for these cases. You can obtain a free annual check at your reports. If in case there are errors in your credit report, you should clean it up before applying for any new accounts.
- Set up savings and checking accounts. Lenders consider bank accounts as indication of a person’s stability.
- Learn the basics of credit scoring. There are different factors which determine your score. They include:
- Payment history
- Amount borrowed
- Length of credit score
- Type of credit used
- New credit
There are some tips to help you become a good credit.
- Have an automatic reminder or payments system to avoid making late payments
- Keep credit less than 30 percent of your credit limits.
- Pay bills monthly in full
- ‘Borrow’ another’s record. This means being added to a credit card as a joint account holder or by finding someone to co-sign a loan for you. But first you have to check the record of that person before borrowing.
- Apply for a credit card that is secured. Apply for one that has lower annual fees and no application charges. After a year and a half of timely payments, convert into an unsecured credit card. You shoul