Most people, when asked how their credit score came to be, would most likely return a blank stare. Even, surprisingly, people with excellent credit. Oftentimes, individuals who have good credit arrived that way by means of a process of having all of the normal types of credit accounts, paying their bills on time, and as a consequence, ending up with a good credit score with as much luck involved as planning, and usually more so. For an individual just beginning off, or for the person trying to repair their credit score after their credit has taken a beating, there is a faster, more efficient way of going about the course of strengthening your credit score on purpose.
Probably the best place to start is with secured loans. The basic idea: Your bank or credit union keeps your money in an account, and in turn lends you the same amount of money. As you begin to make loan payments, your money will be released back to you until the loan is paid off. Huge win number one of this technique: Banks and credit unions almost never run a credit check for these type of loans because there is no risk to them for lending you the money. Huge win part two: The payments you make are just about always reported to the credit bureaus, which means you start establishing good credit as soon as you make your first installment. The third huge win: You're less likely to deal with the sky high fees and interest rates that you most likely with the lenders and credit cards that approve people with limited or nonexistent credit scores. Wherever you have your checking or savings account will be the best place to start, as you already have an established account history with the institution and they will virtually always approve you to set up payments that come from your account automatically.
Next, move onto credit cards with low balances. You may have to shop around a bit, and be very aware of the terms they extend. If they expect you to pay a significant monthly or yearly fee for the card, continue looking around. Use them sparingly, and pay them off at the end of each month to avoid paying interest.
keep in the habit of watching your credit score. As more and more of your "beginner credit cards" and secured loans start reporting on your credit reportt, your credit score will start to take root and grow stronger. Once your credit score starts to raise, you can continue looking around and get better interest rates on your credit cards, then switch to the cards with the best deal. Lastly, be sure to avoid charging a credit card to its full balance, as it potentially drop your score as opposed to a card with lots of available limit.
Making use of the two types of accounts listed above will lay the groundwork for your credit score to grow, and assist you in being able to qualify for auto and/or home loans. A good payment history on these loans will help your credit to grow as well,, and over time, will be very helpful in your efforts to build a rock solid credit score. Be sure to monitor your credit report so a general idea of your standing is always close at hand.
So regardless of whether or not you're working to rebuild your credit after you've survived a financial disaster, or struggling to establish your credit for the very first time, you can use these simple steps to get your foot in the door of the credit world.
Author Resource:
This article has been compressed to fit the layout of this website. For the complete, original article, including additional supporting information and resources, please click this link --> How to Build Credit on Purpose . Behind the scene secrets from the industry professionals themselves are available at Credit Education: Guides and Workbooks .
![[Valid RSS feed]](http://www.look4articles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
![[Valid RSS feed]](http://www.look4articles.com/images/rss.jpg "XML Feed For RSS")