Would you like to qualify for a loan? Then a good credit history is valuable to you. Learn how to improve it.
Having a good financial history is possible. You can control this and even learn how to build your finance profile. Find cool information on how to establish credit if your don't have any below.
If you have established credit and are wondering if your score is high enough, find out where you stand by knowing your credit score.
Below are some ways to establish credit if you haven't done so.
If you don't have a credit profile, then you need to take steps to create one. Why should you do this? Isn't it better to pay cash for everything?
Unfortunately, when you pay cash for everything, there's nothing to track. So when you're applying for a loan to buy a house, the lender can't see what your payment history is. So they're not sure you're a good risk or not.
One of the simplest and easiest ways to get started with this is to get a checking or savings account. Start putting all your money in these and pay all your bills from them. Its much easier to track your bills and you are establishing a history at the same time.
Of course, you need to be responsible with these. Don't overdraw them!
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 wisely. Otherwise, they will work against you on your report.
What do you do if you are turned down for a credit card? Look into a secure credit card. These allow you to put a set amount of money in this card to use. You use them the same as a credit card except you put the money in the account. It's like having a savings account with a card associated with it. The advantage is it gives you those lines of credit that you need to apply for a loan.
Another thing you can do is apply for a card with a retail store or a gasoline company. They are usually easier to obtain. 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 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.
The best way to improve your history, when it has a mark on it, is to be sure you are paying all your bills on time. Especially, your telephone, gas and electric bills, should be paid on time. Prompt payments reflect nicely on your financial report.
If not, take action to improve that now. Your history can then begin to improve.
Now take a look at those loans and credit card accounts you have. Are you paying these promptly as well? If finances are low, try paying the minimum allowed. It’s important to pay these on time and each month. This way you are establishing a good credit history.
Of course, you want to pay more than the minimums to make headway on these accounts. But for right now you want to establish a good credit history. Not paying anything on these account will hurt you in the long run. So its better to pay the minimum, if that's all you have, than skipping them!
Another way to establish a good credit history is to 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 manageable.
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.
Everything starts with knowing what your credit score is.
Have more questions on credit? This is a great forum for questions and answers. Go ahead...pick my brain!
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