Have you ever wondered how you can build your credit, without it taking up too much time and energy?Building your credit doesn’t need to be difficult. In fact, there are ways you can build your credit without even really trying. Just doing basic everyday things, you can build your credit.
(1) Apply for a credit builder loan
You may not know this, but there are loans out there that can help you build your credit. The main purpose of this entire loan is to help the person build their credit up. Contact your local bank to see if you meet the criteria to take out a credit builder loan.
(2) Start by paying your bills on time
One of the best ways in which you can build your credit is by paying your bills on time. YUP! It’s that simple. By simply paying them a few days ahead, to ensure you don’t pay them late, your credit will start to build itself. Paying bills on time is important anyways, but it’s wonderful that there’s an incentive out there to pay those bills on time!
(3) Use Rental Kharma
Rental Kharma is such an interesting tool to help someone build their credit. Let’s say that you’re paying rent each month, but most of the time, rent isn’t something that shows up on your credit report. Well, things are changing. You can use Rental Kharma to have a bill that you are paying, show up on your credit report. Remember, when you pay your bills on time, it ups your credit score.
(4) Apply for a credit card
Sadly, one of the best ways to build your credit is to take out a credit card. A credit card, when used responsibly, can be a great tool in building credit. You don’t need a credit card with a huge credit limit. However, you do need to make sure you’re paying off your credit card each month. Each time you pay it off, you’re building credit. You’re showing those creditors that you’re wise with your money and capable of paying off money you owe.
(5) Keep an eye on your credit score and report
There are so many apps out there that allow you to check up on your own credit report and score. This is always a good thing to do, incase you have a negative report on your credit score. Do you know how easy it is for someone to steal your identity? When someone does this, it ruins your credit in no time. Log into an app like Credit Sesame or Credit Karma and start checking on your credit score and credit report.
(6) Keep unused credit on your credit report
For some reason, the reporting credit agencies love it when you have unused credit on your credit report. You should only use around 30% of the total amount of credit you have available. If you think it’s weird that you’re not using all the credit you have available, it’s not weird at all.
(7) Don’t open too many accounts at one time
Credit reports can be finicky, which means you have to follow certain rules from time to time. A good example of that rule is not opening too many accounts at one time. Essentially, don’t run out and open 5 credit accounts in one day. Some say that you should not do this because it lowers your overall “credit age.” You want it to look like you’ve had credit for a long while, so opening up several new accounts, at one time, can lower your credit age.
(8) Don’t close accounts
Another way to build your credit is to not close any of those accounts you aren’t using. Sometimes creditors will close the accounts on their own, but you don’t need to do anything. Pay them off and enjoy the benefit they add to your credit score. You will need an account that’s in good standing for as long as possible!
(9) Pay your student loans on time
Student loans are something that greatly impact your credit. It’s important to pay your student loans on time, every time. This shows that you’re responsible with your money as well. [source]
It’s important that you follow these tips to help you build your credit. Credit is your ticket to getting lower interest rates on loans. Credit is also the ticket to help you obtain a car loan or a house loan. It’s not always fun to keep tabs on your credit, but it’s always worth it because in the long run, you spend less money on interest fees.
Building your credit can be pretty painless if you know what you’re doing. These best ways to build your credit are the perfect tools to help you succeed in your financial goals.
What is the best way you’ve ever tried to build your credit?