Without good credit, you’re going nowhere. Without good credit, you can’t get a home mortgage or a car loan at a decent rate. Without good credit, you can’t even get a credit card. It’s a vicious circle that always seems to bite you at an inopportune time. Is there a way that you can repair your credit so that loaners will take you seriously? As it turns out, there are several ways to establish credit so that you can qualify to take the next positive step in your life.
Open Up A Bank Account To Get Your Credit Started
One of the best ways to get your credit started is to open up a bank account. Having an account is an excellent way to establish a level of trust that prospective lenders are sure to take a look at when it comes to evaluating your request. Your banking history is an excellent way to prove that you do have a few years of experience under your belt when it comes to managing your money responsibly. It’s also a quick and effective way to prove that you have had a steady job (and thus a steady, reliable income) the entire time.
Get A Co-Signer With A Good Credit History To Help You
It’s an excellent idea to get a co-signer with a good credit history, such as a family member or trusted friend, to help you with your first credit card or loan application. This way, the lender isn’t forced to make a decision with only the scanty evidence from your short credit history to go on. The fact that a friend or relative has added their own credit history to yours will “fatten” up your potential to get the green light.
Of course, this also means that you will be morally, as well as financially, compelled to live up to your promise to pay all of your bills on time. After all, you have not only put your own credit history to the test, but also someone who is very close to you. If you default on payments, you’ll be delivering a nasty hit to their credit history as well as your own.
Establish Your Credit History With A Secured Credit Card
Another creative way to establish your credit history is by doing it with a secured credit card. The average credit card is considered to be “unsecured” because there is no firm line of collateral backing it up. However, a secured credit card is solidly backed by collateral that the bank holds in an account (either your own account or another account that the bank will require you to open up for this purpose).
This means that your credit limit is the same as the balance on your checking account, or the additional account the bank has had you open. The amount of money that you have in this account is the amount of your credit line, and you cannot go beyond it.
Get A Credit Card From A Retail Store
You can quickly build up your credit history by getting a credit card from a major retail giant, such as Amazon, Home Depot, or Sears. This type of card is usually much easier to acquire than the normal variety of “unsecured” cards. Although they don’t establish your credit history as authoritatively as an unsecured card, they make an excellent introduction to the world of credit and will play their part in helping you get taken seriously when you apply for your first loan. These cards do tend to carry a much higher interest rate, so it’s imperative that you make all of your payments on time.
Check Your Credit Report To Make Sure Your Score Is Good
Equifax, TransUnion, and Experian are the three major agencies in the United States that collate your credit history data and report these facts to anyone who wishes to research your credit history. If you have a history of bad credit decisions, they are sure to show up in the data provided by at least one of these agencies.
It’s an excellent idea to apply for a free credit report. There are a number of places online that you can do this. By getting a free preliminary report, you can find out exactly what is on your report, and fix any errors that may be there. It’s a good idea to ask for your free report on your credit history at least once a year.
Never Be Afraid To Get Creative When Establishing Your Credit History
The above listed examples are only a small sampling of the many ways by which you can quickly and safely establish a credit history. When it comes to doing so, never be afraid to get creative. The bottom line is to do it as quickly and efficiently as you can, so that you will never be at a loss when it comes to getting a loan for a home or vehicle. The sooner you get your credit rating firmly established, the sooner you can move on to establish your financial independence.
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