Almost everyone has some type of credit score. Some people have good credit, others have bad credit, and still others don’t have any at all. Because of these many different stages of credit, there are many different solutions to building credit. The following are a few strategies to help you get started at whatever stage you are at.
Different Strategies For Building Credit
Not having any credit is a better place to start than having poor credit, because you don’t have to rebuild any poor credit you may have had in the past. If you’re looking at building credit, the best way to do so is through applying for an individual, major credit card. For someone who doesn’t have any credit history, you might have to ask a family member, or trusted friend, with good credit to co-sign for you. Once you get approved for a credit card, make sure you pay all of your monthly payments. Remember that if you do miss a payment, your co-signer has to pick up the responsibility. Another option for someone who doesn’t have credit history is to apply for credit cards supplied by gas stations or department stores. These cards are pretty easy to get approved for, and if you stay on top of your payments, you will start building good credit. Usually after you go six months without a delinquent payment, you will be entitled to more credit and more options. If you want to pay off the previous loan you got to relieve your co-signer of their duty, you can take out a personal loan, pay off your previous loan, and start making payments on your new personal loan. Just remember not to ever borrow more money than you can pay back, and avoid high interest rates and upfront fees.
Different Strategies For Bad Credit
If you have already established credit, but you ran into some problems and it’s not very good, the place you need to start with is your credit history. You need to know what and with whom you’re dealing with. Your credit report will have all your transactions on it both good and bad. You can receive a free report once a year which can be obtained from either TransUnion, Equifax, or Experian. After you have reviewed your reports, and you know what you are dealing with, make sure that there are no activities on it that you did not authorize.
If you notice fraudulent charges on your report, immediately send notice to the credit bureau, and they will be required to follow up with an investigation. Once you feel you understand why your credit score is what it is, start paying off your bills one by one. Work on your secured debts first, and then move onto your unsecured debts, which can be put off a little longer. Repairing your credit is not an easy process, but it will be well worth your time. One strategy that takes discipline and sacrifice is to give up something that costs you money that you enjoy, and don’t do it anymore until your debts are paid off. This means you might have to get creative when it comes to entertainment or cellular phone services. Another helpful strategy is to use all the resources that are available to you. If you are good at selling things, maybe you could try to barter some goods on the internet; if you are good at business, maybe you might try opening up a small side business to get a little extra income. If you are being resourceful, cutting back on expenses, and researching your options, you will find yourself climbing slowly out of debt. Try to do everything in your power to never miss a payment, and you will not only get out of debt, but you will help yourself stay out of debt as well.
Good Credit Scores
Finally, if you already have good credit, give yourself a pat on the back—it’s not an easy thing to do in today’s fast-paced, immediate gratification society. What you want to do is keep your score, or even try to increase it if possible. Maintain, or update, your monthly budget so you can continue paying your bills on time. Don’t become reckless with your good credit and start applying for credit loans that you don’t really need. A good word of advice is to payoff what you owe now and buy what you want later. If you have good credit already, don’t get careless and forget all the work it required to get it that way.