Build Credit History

Build Credit History


Issuers of store credit cards are lenient when it comes to the credit history of a consumer before issuing a card. So if you are trying to establish or restore your credit history, a store credit card is a good option for you.
Every time you pay a bill on time — or don’t pay it on time — you’re building your credit history.
Learn about your current financial situation before diving into building credit. The best way to do this is by checking your credit report, which can be obtained for free once a year from each of the three major credit bureaus: Experian, Equifax and TransUnion.

When you are ready to start building credit, experts suggest focusing your attention on one line of credit. Credit cards in particular may be a good starting point. Because unsecured credit cards have spending limits determined by your credit history and income, it may be hard to acquire one at first. Secured credit cards require a security deposit that becomes collateral as well as the credit limit for your card and may be an easier place to start, according to an Equifax. Every card issuer has different standards so research your options to find a card that has a lending profile that fits you best, according to the NFCC.

How can you achieve or maintain a good credit history? Here are a few suggestions:

Tip #1
Create a budget so you know exactly where all of your money is going. Keep daily records of everything you spend for a month and decide where you can cut.

Tip #2
Start a savings account and commit to funding it regularly. One reason people run into credit problems is that they don’t have cash on hand for everyday purchases.

Tip #3
Consider transferring the balances from multiple credit cards to one new, low-interest credit card.

Tip #4
If you own a home, consider taking out a home equity loan to pay off the balances on your credit cards. The interest usually is tax-deductible. Consult your tax advisor regarding interest deductions.

Tip #5
Balance your checkbook regularly to prevent checks from bouncing. Too many bounced checks can have a negative impact on your credit report.

Tip #6
To avoid late fees from creditors, make it a point to pay your bills on time.

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