How to Establish Credit
January 18th, 2009, Written By: admin
When learning how to establish credit, don’t let the various methods out there complicate things. While you can’t build credit overnight, establishing credit is fairly easy. Follow these simple steps and you’ll have a credit history that will allow you to obtain loans, rent an apartment, and get credit cards.
How to Establish Credit
- Find Your Cu rent Credit Rating: It is possible to have no credit history, but there’s a good chance you have some information on your credit report even if you have never owned a credit card. This file includes previous addresses, employment history, a list of companies and people that have tried to pull your credit, and instances when you have applied for credit. While most of these things won’t affect your score in any way, it is still a good idea to know where you stand. Request Your Credit Information
- Piggyback: The easiest and quickest way to establish credit is to use a technique that is called piggybacking. By piggybacking off your spouse’s or parent’s credit, you will immediately establish credit yourself. To do this, the person you want to piggyback off of has to add your name as an authorized user to one of their credit lines. This is as simple as making a phone call. Note that this works best when piggybacking off an immediate relative.
- Get Credit: Next, try to obtain a credit card, even if it is only for a $250 credit limit. If you cannot get approved for a credit card, apply for a secured credit card, which is a card that requires some sort of collateral – usually in the form of cash. Once you obtain your card, use it regularly but with moderation. Charging $0.10 is enough to build a credit history. Usage and paying off the bill in full is much more important than how much you use. In fact, the closer you get to maxing out your credit limit, the more it will hurt your credit score.
Follow these three simple steps to establish credit and you’ll have a credit history in no time. Before you begin, request your current credit information. It is completely possible that while you may think you do not have credit, that there is wrong information on your report that could make you have bad credit. If that’s the case, you’ll want to get that fixed right away.
Request Your Credit Information
Categories: Establish and Rebuild Credit
