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How to Build Your Credit From Scratch!

How to build you credit from scratch. If you just starting building your credit now or rebuildig it. Take a look at this article for some helpful ways to build credit.

How to Build Your Credit From Scratch!

Have you planned on getting a credit card, a new car loan, or even a mortgage for a new home? If so, then you should know by now that credit plays a vital part in obtaining these goods or services.

Your credit is a way for creditors to determine the type of reputation you have. Obviously, the better reputation, the easier for the creditors to approve you for what you need.  It is a way for you to show them that you can repay what you owe.

Would you lend money to someone who wouldn’t pay you back? I wouldn’t

If you’ve been paying cash up to this point or just young and ready to start your life. Building your credit is crucial in improving your personal finance and the things you want as you grow through the stages of life.

Build Your Credit with Credit Cards

Has your credit card application been denied because of no credit history? Many individuals find themselves in this situation and wondering how do I get a credit card if they keep denying because of credit. Here are a few ways to work around this issue

Secure Credit Card

This is a guarantee way of obtaining a credit card. Basically, you will deposit cash into an account as collateral for the bank to issue you the card. This will lessen the risk they see in you as a new credit user. So if you were to stop making payments. They would simply close you your account and take your deposit. Just make sure that credit card company reports to the credit bureaus, so that you can build a positive credit history.

Student Credit Cards

Student credit cards are great for young individuals starting to build their credit. These type of cards normally have a higher acceptance and come with some decent perks. However, they normally have pretty low credit limits and higher interest rates.

Retail Credit Cards

These are the easier cards to obtain to build credit, while shopping at the stores you love. Walmart, Target, Best Buy and many other large retail giants offer these cards to their customers. They come with a lot of perks such as rewards, discounts, and points as their way to keep you coming back as a customer. They usually have lower credit limits and a little higher interest than non-retail cards.

Become an authorized user

Do you have a close friend or relative willing to share their credit? This is another great option in obtaining a card, by becoming an authorized user on their account. By becoming an authorized user, you also inherit the age of the account, payment history, and limit that will give you a better jump start on your credit. Keep in mind, that the original card holder becomes responsible for you if you ever have late or delinquent payments on the account. This will ultimately affect both users on the account.

Some card companies sometimes do not report authorized user to the credit bureaus. So give the card company a call and ask if they do before asking to become an authorize user.

What do you do now after you get a credit card?

Now that you jumped over the obstacle of getting a new credit card with no credit, its time to start building a positive credit history so that you will have credit. Take advantage of learning how to use your credit properly, so that you have foundation on how to handle higher credit limits. Make sure to make small purchases only or when needed. Pay the balance in full each month is one of many tips for a successful step in your personal finance.

How to build your credit from scratch
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Kim Lee is a UNLV graduate with a degree in Biotechnology. He has natural attraction toward technology, with a passion of servicing and helping people. Finance has always been his main interest and hobby, as he likes to dwell into small business and investing ventures. He writes and shares what he learns on the way, while he tackles on a life as an entrepreneur.

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