Lenders will not lend you money unless you have good credit history. If you don't have credit yet, then you wouldn't have any credit history. If you don't have credit history, then lenders would not lend you money. It is as simple as that. Follow these instructions to build new credit.
Start Early
It would really benefit you to build new credit while you are still young because you gain the responsibility that comes with financial independence.Most people run into trouble by learning about credit in college, when they have no job, and no one to teach them right from wrong. By the time you graduate you're eyeballs deep in debt.
However, if you are starting young, use your parents to guide you. Start by becoming an authorized user of your parents' credit card. Since financial responsibility is a step by step process, this is the safest and most responsible way possible. As a young adult, you can learn the basics about credit card use - and at the sam e time you are still properly monitored and guided.
After you have learned how to use a credit card responsibly, and you have proven that you can be trusted with credit, then you can now build new credit tradelines of your own.
Getting Your First Card
Since you are just starting out it makes sense to start small and apply for just one card. I'd recommend getting a secured credit card only from your bank. An advance payment may be required from you. The amount you paid as an advance payment will be the amount you can initially spend. For instance, the advance payment required may be two thousand dollars. That means that you can spend up to two thousand dollars initially. You should know that all charges you made on purchases will be deducted from your advance payment.
The reason I recommend a secured card is because my philosophy is to only make purchases on your credit that you can pay the full amount off with by the end of the month. A secured card will help train this behavior.
Get A Retail Card
As a beginner, you may use retail cards and take advantage of retailer programs. Although retail cards have fewer benefits and have lower spending limits, they can still help build your portfolio. Retailer programs are also easier to qualify and its good to diversify your credit once you've mastered good spending habits. Just make sure that the retailer reports to the major credit reporting companies.
Do Not Overcharge Your Credit
Do not overcharge your credit or you might find yourself in deep water. Spend only on things that you really need and just occasionally spend on things that you want. Avoid being an impulsive buyer and watch your limits.
Avoid Having Bad Credit And Monitor Your Credit Report
Always pay on time to avoid having bad credit. Maintain a good credit standing and a clean credit history at all times to keep your interest rates low and payment terms favorable.
You should also monitor your credit report at leas t once every 6 months. The FTC requires each credit bureau to provide a free credit report every 12 months. All you have to do is claim yours.
It is fairly easy to build new credit. So long as you develop good spending and payment habits you'll reap the rewards that come with it.
Brian Diez is a nationally recognized credit expert and the CEO of ScoreMoreCredit.com. To learn how to build new credit fast or boost your credit score without credit repair, visit ww.Build-Credit.net
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