Building credit can be done in several different ways depending on what you are most comfortable with. You can build credit by using a credit card every month to make purchases and by paying off those purchases on time every month while keeping a low credit balance. There are also ways that you can build a strong credit rating without making purchases and payments as well. For example , you could cut up your credit card and your score would still continue to improve. The key to building a great credit score is to get started as soon as possible and avoid making late payments. In order to begin building and maintaining a strong credit score you’ll want to begin by following these 6 steps.
Step number 1: apply for a secured credit card or a starter credit card.
Many financial institutions offer great beginner credit cards. Two of the common providers are Discover and Capital One.
Step number two: Set up automatic monthly payments to your credit account.
This will prevent late payments.
Step number three: use less than 30% of your credit limit each month and ideally 1% to 10%.
This shows creditors that you are responsible with your credit limit and not maxing your limits.
Step number four: Pay your full balance by the due date.
By paying the balance in full every month you also won’t have to worry about paying interest as well.
Step number five: use a credit monitoring app like credit Karma to monitor your credit over time and make sure to dispute any incorrect information which may bring down your credit score.
Optional Step: Become an authorized user on a family member’s credit card. If your family member uses their credit responsibly then you will benefit from their credit history.
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