Ways to build your credit

Ways to build your credit

Find effective ways to build a solid credit history, even if you do not have a previous credit history or if your credit history is limited.
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Building and maintaining a good credit history are key steps in the development of your financial future. At first, credit can seem frustrating: you can not get credit because you've never had credit. But there are steps you can take to start establishing a solid credit history.

Why you should establish a credit

If you have always paid with cash or checks to make purchases and have not used credit, starting to do so is a good idea. And if you've had credit problems in the past, it's important to re-establish your credit history for a few key reasons:

You may need to have good credit for routine issues, such as connecting utilities in your home.
Good credit is important to get financing when buying furniture, a computer, an automobile or even a new home.
Employers often check the credit rating of potential employees.
Renting an apartment can be easier, since a good credit rating informs landlords that you are a person who is most likely to pay rent on time each month.
If you need a loan, banks may consider you more favorably if you have a good credit history.
"Use your credit card to make purchases, but do not exceed your credit limit."
How a credit card can help

A credit card can be a good way to start building your credit. You can use your credit card to make purchases, and they are very convenient. One way to start establishing a credit history is to have one or two department store or gas station cards. They allow you to:

Buy products online, over the phone and through mail order catalogs, when cash may not be an option
Make travel reservations, buy air tickets and rent cars
Buy more safely without having to carry much cash
Budget bigger purchases by paying in installments
Access your funds for emergency needs
Ways to Manage Your Credit History

Once you start using credit, it is critical to manage it properly. So, use your credit card to make purchases, but do not exceed your credit limit or let your outstanding balance become too high to handle. Make at least the minimum payment due each month, or more if you can, and pay promptly. The best way to reduce interest owed on a credit card is to cancel the balance as soon as possible. Otherwise, it may take many years to cancel even a small credit card balance if you only make the minimum payments. By following these suggestions, you can build a solid credit history that will help you achieve your financial goals.