A Good Credit History is Possible!

Having a good credit history is possible. You can control this and even learn how to build one.

Establishing good credit is very important. You need a good credit history if you want to qualify for a first time home buyer loan. If you have no credit history at all, it is easy to start creating one.

Open a Bank Account

Open a bank account is the simplest and safest way to manage your finances. By opening a savings account or a checking account, you start building good credit by saving money and earning interest. This makes it easier to pay bills and provides a way of tracking expenses.

Pay Bills in Full and On Time

Those services in your name, such as telephone, gas, and electric, must be paid in full and on time. This also will reflect favorably on your credit report.

Pay any loans and credit accounts on time each month. If finances are low, try paying the minimum if there is one. It’s important to pay these on time and each month. This is an important way of establishing good credit history.

Apply for a Credit Card

Applying for a credit card gives you an additional trade line on your credit report. Since you need three to five trade lines on your report to apply for a loan, this is a necessary step. But remember; use these credit cards responsibly to build a good credit history. Otherwise, they will work against you on your credit report.

If you have been denied a credit card in the past, you may want to investigate a secured credit card, where you put a pre-determined amount of money in an account as a deposit in the bank. The secured card can be used in the same way as a credit card. More importantly, it gives you those lines of credit that you need to apply for a loan.

Gasoline companies and retail stores also offer their own credit cards. Perhaps you can apply for one of these to improve your credit history. Even if the credit limit is low, it still helps.

Perhaps you have a family member, with good credit, who will allow you to be added to their credit card. This is a quick way to add a trade line to your credit history. A word of caution, only use those who have a good payment history and don’t have their credit card balances high. You can even ask the family member not to send you the card if they’re concerned about your using it. As soon as you obtain the loan you are seeking, have them take you off their credit card.

Get a Loan for a Small Item

Purchase a small item and finance it. It could be a stereo or maybe a washer anything that is small and your payments will be small and managable. Make your payments on time for five months and then pay the loan off. That's why you want it to be a small loan so you can pay it off in a short period of time. This will reflect very good on your credit report showing you as a good risk.