Credit History – 5 Things to Do to Build It

May 16, 2012 by  Filed under: Credit 

There are as many different ways to go about building up your credit, or repairing bad history, as there are people. Every situation is different and everyone will put together a different plan for handling all of these things. It is important that you look over as many options as possible and build together the best plan for you and your situation, which is why lists like these with five ideas for things you can do to build up credit history and improve your rating are so important-they give you more options.

The first thing to do is set up a budget. This sounds irrelevant but it is essential for everyone to do this, actually. This lets you figure out what you have going out and coming in every month and makes it easy for you to build up the rest of your plan. Everything you do financially will be based off of this budget, so you need it.

Set up an emergency fund! This way if anything goes wrong in your life, which things inevitably do, you have a small emergency fund to deal with those situations instead of depending on borrowing an emergency loan.

Pay off any of your old debts! This will help you rebuild your payment history, and lower the amount of debt you have, which will greatly improve your credit score all on it’s own. This is a very important part of any plan for credit improvement period.

Get a secured credit card, and use it wisely! The using it wisely part is the most essential part of this plan. The more credit available to you, and the less you are using, the better. So never charge more than thirty percent of your limit. And pay it off in full each month! Remember, you are trying to build up a credit history full of on time payments, so if you don’t pay that balance off every month you aren’t getting anywhere.

You want both credit card and loan payment history to have a complete and varied credit history, so consider taking out a small loan. For credit rebuilding, your lowest interest and most straight forward option is to take out a CD secured loan. This will let you earn interest on the CD, get a low interest rate on the loan, and hopefully you can come out even. This takes some of the pain out of getting loan approval if you have a bad credit rating right now, too.

Whether you’re in a great place or a low place on the credit rating scale, you should always be thinking about building up a history of on time payments so that you can get to and maintain a good credit score range spot.

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