Money moves: Ways to build your credit
You probably get asked the question about how good your credit score is, or what your credit is on a daily basis. Friends, coworkers, family all want to know how good your financial situation is, and it usually involves discussing your credit. Not to worry, while the questions might get old, this information may be new to you, and if it is not, then it should serve as a refresher.
Making the most out of your credit score will help open up more opportunities for you. Some of these can include getting approved for better car loans, renting nicer apartments, or big purchases like a house.
So, if you need help on ways to build your credit, then these tips should help alleviate some questions.
Paying bills on time
One of the easiest ways to start building credit, or help improve your existing score, is to pay bills on time and often. Paying bills on time is a good way to show responsibility for your expenses. If you have monthly payments to make on credit cards, home utilities (water, electricity, etc.) or phone bills and you can pay these back on time or ahead of time, it will help build your credit in no time. Not to mention that this is just good financial habits to build so that you never miss important deadlines for payments, and any outstanding or missed payments can remain on your credit report for quite some time.
Using loans to build credit
While many people might not think of loans as something that can help build credit scores, they are useful for this purpose. Secured loans and credit building loans are used as a way to pay back the lender to ensure you make your payments on time, and to completion. Loans at www.moneyexpert.com/car-finance/car-loans/ are used for financing a car, and usually require a decent enough credit score to apply for, but they can still be used to help build your credit score if you know you can make the payments necessary. Because cars usually require monthly payments for insurance or leases (if you choose to go this route), the loan on the car can help you start to build a strong score to finance a better loan option or cars in the future. Loans are a good option for credit building, whether through a car or a credit building loan specifically, they offer you yet another way to improve your financial situation.
Limit your credit card balances
While spending money with your credit card for bigger purchases you know you can pay back on time is a good way to build up your credit, there is a downside. Racking up a big balance that is hard to pay back on time can hurt your credit. The best way to prevent this? Never leave a lingering balance unpaid. Again, you can and should use your credit card to make purchases but only if you know you can pay it back on time and often. When you leave a lingering balance, you run the risk of interest rates accumulating as well as it affects your credit score.
Become an authorised user on a credit card
Becoming a co-signer or authorised user of a credit card means that you are partially able to use said credit card. The credit history of the primary card holder is important for you because a responsible user can improve your credit too. While this credit building method is a good one, it does require coming to an agreement with whomever is that the primary holder because they will need to know when and what you intend to use this card for.
Likewise, you still need to make payments on it that your own personal card would require. Having a good credit history looks good for credit score collectors or bureaus, but you need to know that this activity is reported so you can actually take advantage of authorised card use to build your own score.
Building your credit score is not some enormous task that takes forever to accomplish. While you would need to put in some time and effort, these tips are useful to get you where you need to be. If you are applying for loans, getting a new credit card, or even buying a home one day. Paying bills on time, authorised credit card users, and using a loan to help improve your score is easy if you follow these simple tips and apply them to your life.
The editorial unit
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of this article’s information without taking appropriate professional advice.