How to Build Your Credit from Scratch

by Bievienea Harry

Building credit can be a slow process. When you are faced with the task of building it from scratch, it can seem to take a long time. Have patience, and use these tips to help you get a good start. In no time you will find that you have a diverse amount of options to equip yourself with.

Find and Maintain a Stable Job

Perhaps you are already off to a good start, having had a long-term, stable job. If not, it should definitely be one of your main focuses in the immediate future. Secure a job that you can envision yourself at for many years. Stability in a job always looks good as far as credit is concerned. If you have been working at the same place for many years with a steady incline in regards to your pay check, you will come across as a stable individual who will be able to make regular payments.

Obtain a Bank Account

Obtaining a bank account should also be at the top of your “to do” list. Any bank account is fine. The point is to open one and maintain activity. This will prove that you are able to keep a bank account running, along with its transactions and deposits.

Obtain a Credit Card

If you do not yet have one, obtaining a credit card is a goal you should make. This is an essential way to make your dreams of building your credit come true. There are many options when you are searching for credit cards. Be sure to do your research and find the credit card that is the right fit for you.

There are many types, from those that are high interest with no fees, to those with low interest for individuals who tend to carry a balance, to credit cards that have a reward point system. There is no “one size fits all” when it comes to credit cards, so research your options and ask friends and family what they love and hate about their own credit cards.

Pay Your Credit Card on Time

Once you have your credit card, make it a priority to pay it on time in a monthly fashion. It used to be believed that you should keep a balance on your credit card in order to build credit, but that has now proven to be false. A better way to build your credit is to pay on time, and in full if possible. This will show that you are a trustworthy individual who can make regular payments on time.

Live within Your Means

One of the best pieces of advice to someone who wants to build credit is to live within your means and not overspend. It won’t do your credit any good to have a job, bank account and credit card if you are constantly in debt and not paying it off in time. Instead, live frugally and stick within your budget.

It doesn’t have to be difficult to build your credit from scratch. It simply takes a bit of planning and lots of patience. By using these steps, you can easily build credit from scratch and be one step closer to the dreams you have for your future.