When you are trying to build a good credit profile, you must begin with adding credit activity that will be favorable. Some favorable methods are secured credit cards, a credit-builder programs and having specific monthly payments reported to the top 3 credit bureaus (Equifax, Experian and TransUnion). Check each credit report each year and analyze for discrepancies and errors (www.kreditkoncepts.com).
You can use the following channels to build good credit:
- Seek Well-respected Secured Credit Cards – These cards are backed by cash deposits that make upfront and this deposit amount is generally the same as the credit limit. When you use the card and make payments prior to the due date, it builds up your credit score. The deposited amount is returned as your line increase or upon closure of the account. Do not have too many new accounts; new accounts lower your average account age ratio. A true FICO score killer. Keep accounts open for long periods of time. Having accounts that in good order and active helps payment history and credit utilization.
- Credit Building – We suggest http://enroll.kreditkoncepts.com/ for this type of credit building. The credit line of $1,500 provides a platform to purchase products and make appropriate payments to build credit. Maintain a low credit utilization (www.kreditkoncepts.com). Utilization is the balance when compared to limit. Pay in full each month! Or at least keep the balance at 30% of the credit limit.
- Authorized User on someone’s credit card – You can ask a very responsible friend or family member to list you on their credit card, but limit your access to the card. As they make their payments, you credit will improve.
- You pay monthly items – Yes, you are a responsible payer (hopefully) with rent, phone bill, utilities… Therefore, you can ask that the entities that you pay report to the top 3 credit bureaus. This will help you build credit.