A Good Credit History is Possible. How can I build one that lenders like?

How Can I Establish a Good Credit History?

This is important to establish good credit. You need a good credit history. If you have no credit history at all, it is easy to start creating one.

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.

Responsible use of a checking account or an Automatic Teller Machine (“ATM”) card builds good credit and show favorably on your credit report.

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.

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.

To continue learning more about a good credit history and how you can build one click here.