Having good credit is important to a lot of people. If you are young and just now starting out, you might wonder how to build good credit. It’s not hard. Below are 5 ways to help build your credit up.
Open A Bank Account
If you are young and trying to build credit, the first thing that I would do is to open a bank account. I would open a checking account and start off with $100. You should make sure that your account stays in good standing. Also try not to get any overdrafts. An overdraft happens when money is withdrawn from your account and the available balance goes below zero. When you’re building credit, overdrafts don’t look good at all. Your bank will also charge you a fee for those as well.
Take Out A Small Loan
Taking out a small loan is another good tip. A good amount for the loan is $200 or less. You should pay the loan back in full monthly if possible. Repeat that process a few times. The more you do it the better it looks to a future lender.
Have Good Employment History
Having good employment history is very important. It shows people that you are reliable. Lenders probably will not give you a good interest rate if they see you jumping from job to job or if you have long bouts of unemployment. They are looking for stability.
Get A Credit Card
Getting a credit card is another way to help build credit. Only use this tip if you are mature enough. A lot of people mess their credit up by freely spending money that they really don’t have. My suggestion would be to get a card with a limit of no more than $300. Use it a couple times for groceries or gas and pay it off in full monthly.
Pay Your Bills On Time
My last tip is that you should pay your bills on time. Whether it’s a phone bill or your light bill, pay them on time. Lenders and creditors check this information. If you don’t have much credit you definitely want to make sure the bills are paid on time.
These are just 5 ways to help people build their credit. What other ways are out there? Feel free to comment below.
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