It is much easier to build and maintain good credit than to fix credit that is bad. There are quite a few things you can do to build yourself a good credit history so you can receive a good credit score and good loan terms.
Maybe you are young, just out of high school or college and getting your first credit card or maybe you have never used credit before and want to establish a good credit history so you can make a large purchase, such as your first home. Read on to learn how to take control of your credit report and make it work for you.
At TopTenREVIEWS We Do the Research So You Don't Have To.
Protect yourself from identity theft. It is potentially devastating to create a great credit profile only to have it tarnished by someone who steals your identity. Keep your private information safe and only use trusted websites.
Open up a few lines of credit. It looks better on your report to have a several credit cards that you sparingly use and pay on time, than one card that is used all of the time.
Make more than the minimum payment. Making more than the minimum payment every month looks good on your report; it will help you pay down your debt and it will raise your credit score. Pay what you can comfortably, so for example if your credit card payment due is $50, pay $75. This indicates a responsible attention to paying your debts.
Keep an eye on your credit report. You can request a free credit report online at annualcreditreport.com. Once you receive your report make sure that all information is accurate. If you find discrepancies you can dispute and fix credit report errors by contacting the report agency and requesting a correction.
Set up payments online or to be paid automatically. Many creditors will set up automatic payments pulled directly from your credit or debit card. In addition, some banks will let you set up automatic payments with all of your creditors and they will send out scheduled payments automatically for you.
Keep your job for as long as you can; a good work history helps creditors feel more comfortable because you are proven reliable and financially stable.
Maintain the same mailing address or residence. Leapfrogging addresses make creditors leery; if you must move make sure all of your creditors have your most current address so you do not accidentally miss a statement and pay a bill late.
Pay all of your bills on time. If you know you have to make a late payment call your creditor ahead of time so you can make payment arrangements that will not reflect badly on your report. Some credit companies even have policies in place to help you if you lose your job, are deployed or become gravely ill.
When you use your credit cards do not max them out; on your credit report this makes you look irresponsible. Instead use only about 30% of the balance.
If it is your first card or line of credit you can often use a co-signer with a good line of credit to receive a good interest rate on your first card - this means a lower payment and better interest.
These are just ten basic things you can do to build a good line of credit or maintain one. There are of course many more things you can do to keep your budget manageable so you can easily pay your bills on time without stress. One good practice that will help you maintain your good credit is to have a rainy day fund, so if you get sick or lose your job you can still make your credit payments easily. All in all, it takes patience, discipline and good organizational skills to build a good line of credit, but with a little time it can be done.