Having good credit is important for everything from getting a home or car loan to renting an apartment or paying for cable television services. If you already have good credit, you have no problem, but you don’t automatically get good credit the moment you acquire a credit card. It takes time to build credit, so use these tips to build a good credit history.
Apply for a Credit Card
The easiest way to build credit is to open a credit card account. Try choosing a card that offers you some benefit, such as cash back, airline miles or a discount on gas and groceries. As long as you make regular payments each month and don’t let credit charges get out of control, you’ll start building a good credit history in six months time.
Get a Car Loan
It may be hard to get a loan for a new car purchase or lease if you haven’t built credit yet. However, if someone with good credit agrees to cosign the loan with you, your chances will definitely improve. As long as payments are made on time, you’ll continue to build credit for yourself.
Get a Credit Builder Loan
If you prefer not to get a credit card and don’t need a car loan, you can still build credit through a credit builder loan. The purpose of this loan is exactly as its name implies. You borrow a certain amount of money, which is held in an account by a lender, and as you pay back the loan, you build credit. Credit builder loans are usually offered by credit unions.
Get Added as an Authorized User on Someone Else’s Credit Card
You may have family members or close friends who will add you to their own credit card accounts. As long as they maintain good credit, you will also build credit, even if you don’t charge anything yourself. Of course, you’ll have to come to an agreement as to what privileges you have with their accounts.
Remember, no matter how you choose to build credit, it’s important to always make your monthly payments on time. Doing so on your credit accounts, as well as other bills such as utilities, will ensure that you continue to build and maintain good credit.