How to Build Up Your Credit and Credit Score

It is extremely important for a person in this day and age to build up their credit and have a good credit score. Most banks will not give home or car loans without first checking the person's credit. They must make sure the borrower is reliable and responsible before giving them money. Good credit ensures that the person will pay less finance charges and lower interest rates.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

• Savings or checkings account

1. Get a checking or savings account...or both. Lenders will view your banking accounts as signs of stability. They will also see that you have a steady income, and it will show that you have the potential to be a reliable borrower

2. Use another person's good credit to your advantage, with permission of course. Ask a relative or close friend with good credit if you can be added to their credit card as a joint account holder. This credit card will show up on your credit report and boost your score.

3. Get a store card with a small limit, which is usually easier to get than a regular credit card like Visa or Master Card. Store credit cards also have small limits and can only be used at the specific store, which will keep you from spending too much money.

4. Apply for a secured credit card, which is a card that requires a money deposit with the lender. The credit limit is usually equal to the deposit you made. This ensures that the limit won't tempt you to spend wildly.

5. Check your credit report. Keep track of any changes such as negative accounts, late payment reports from credit companies and any fluctuations in your score. This will also help you to spot any criminal activity such as identity theft, which may potentially damage your credit.

Tips & Warnings

• Pay off the balance on any credit cards as soon as you make a purchase.
• Avoid using your credit card for superficial expenditures.

Resources

• Get your credit report here for free!

[lezsays]

on 7/11/2009 Great tips.