A Quick Guide to Building Credit
Albert Einstein once said, “Nothing happens until something moves.” Well if you are looking to Buy a Home, Lease a Car, Apply for Credit Cards or even Look for a Job…nothing happens until your credit score moves…and MOVES UP!
So if you do not have a credit profile…you are a “ghost”! You have no established credit history or credit profile therefore banks and lenders will be reluctant to lend you money to buy a home, car or even offer you a credit card.
There are three major credit reporting agencies in the United States: Equifax, Experian and Trans Union. These companies are not government organizations, they do not share information with each other but they do all collect and report data from institutions that provide credit or loans to consumers.
If you have not established a credit profile or credit score the first thing you will need to do is get some credit. That might be easier said than done….but there are some Banks or Credit Unions that provide a secured credit card and that should help you get you on your way.
We can also help you get started. If you are paying rent we think you should get credit for your timely monthly payments.
Why go into debt just to establish a credit profile??? Use your existing timely payments to start building your score…it just makes sense!
Do not get added onto someone else’s credit card as an “authorized user”
An authorized user account will include someone else’s credit information on your credit profile which could increase your credit score…but it is doing that artificially. It’s not really your credit and mortgage lenders and banks will typically want those removed prior to approving you for a mortgage loan.
To build strong credit you’ll need to be able to demonstrate a positive payment history over time. It is essential that you use credit if you want to build good a credit score.
Thirty-Five percent (35%) of your credit score is based on how timely you pay your debt. Also do not “max-out” credit cards try to keep the available balance at thirty percent (30%) of the actual credit limit. For example if you have credit limit with a limit of $1,000 try to keep the actual balance around $300. That will have a positive impact on your credit score. If you keep exceeding that amount – ask the creditor to increase the limit for you. This segment of the credit score calculation equates to Thirty percent (30%) of your score…so this is very important also.
So Sixty-Five (65%) of your credit score is based on just these two items…you should be able to build a good solid credit score in no time by following these rules.
There are also companies that can help build your credit score and credit profiles and it is always a good idea to have seasoned professionals in your corner to help. A few programs that we found are particularly helpful are:
Positive Credit Builder Program : Is an analysis of your personal credit score, including an extensive credit library full of tips, financial calculators and insight to help you build up your credit score.
Credit Restoration Program : Remove inaccurate, erroneous and obsolete information from your credit file by disputing derogatory items that may currently be hindering your financial opportunities.
DebtZero Program : Input your liabilities and the DebtZero Program and it will show you a simple plan on how eliminate your debt and increase your savings quicker than you may have thought possible!
The bottom line: Slow and steady is the name of the game. If you have any questions relating to credit or you are looking for professional help in creating, establishing or even repairing your credit let us know.