Building a good credit is very important for the rest of your life. Good credit can help you buy a home, finance your education and many other things. However a bad credit can keep you from all of your dreams.
From your student loan to your first credit card, everything you do will be building your credit history, which will affect your financial life very long term. So if you understood the importance of having a good credit history, here is how you can do that.
Making a god credit history starts with having a credit. You might be thinking, if you don’t have a credit history, how will you get a credit? Even though it seems like a vicious circle, it’s not. Here is how to do it.
Secured credit cards
Secured credit card requires you to make a security deposit against the credit limit. If you don’t have a security deposit, you won’t be applied to get one. As security deposit eliminates a part of the credit risk, the chances for you to get approved is higher.
Be an authorized user
If you can be an authorized user, you will have so much more chance to jumpstart your credit. If your account is in good standing and doesn’t have a late payment history, it will be great for you.
Find a cosigner
A cosigner with a good credit can help you improve your chances of getting approved for loans or credit cards. Don’t forget that your negative actions will affect cosigners credit too.
Never make your payments late
If your credit score is important for you, you need to be very careful about your payment history, as it’s the most important aspect of credit score. If you make your payments on time and don’t be late, you will be getting a good credit score for the rest of your life.
Don’t apply for too many credit cards
Don’t make the same mistake with majority of the people. People tend to make a collection of credit cards within their first few years of using credit cards. It will be so much hard to track your balances and payments if you have too many credit cards.
Never borrow more than you can afford
You know your income better than anybody else. Never make the mistake of borrowing more money than you can pay each month.
Pay more than minimum limit
Majority of the people tend to pay the minimum amount for their credit cards each month. If you pay the minimum every month, you will be having too much debt in a short period of time. The debt might get more than you can afford. You should pay off your balance each month, if you want to have a good credit score.