Great Ways to Establish Good Credit
We all have to start somewhere. You might have just recently turned the age of majority. You may have just received your Green Card to live and work in the United States. Or, you might have embraced off-the-grid living until now and circumstances dictate a change in life. In any situation, if you need to establish good credit, you’ll find it’s not as easy as you think.
Financial institutions love to lend money to clients with established credit scores. It seems that anyone with good credit can borrow as much money as they desire, and even people with bad credit have little difficulty getting a loan or credit card. It’s the segment that falls in between – the people who haven’t borrowed money at all – that seem to have the most trouble.
Take heart, though. You can establish good credit that opens doors financially in just a short time. Here are a few ways to do so.
Ways to Establish Good Credit
Get a Credit Card
One of the best ways to establish good credit is a credit card. It can be a traditional post-paid credit card or a prepaid card – either way, if it’s reported to the credit bureaus, it can be a benefit to your cause.
When you get your first credit card, make sure to use it! An idle credit card does little to help you establish credit. Make purchases on your credit card, then pay them off promptly and fully. Avoid late payments and missed payments, and keep your balance at zero from month to month if at all possible.
Apply for a Bank Loan
Go to your financial institution and apply for a loan. It doesn’t have to be a large amount, either. Use the loan to make a purchase, then make the monthly payments on time, just like your credit card. If you want, you can pay off the loan in full with no penalties in many cases. This bank loan will help prove that you are financially responsible and that a lender need not worry that their loan won’t be repaid.
Buy a Car
A car loan is one of the best ways to establish good credit rating. These loans are typically a substantial amount, so securing the loan in the first place helps prove you can handle your money well.
Like a credit card or a bank loan, the number one rule for car loans is to make your payments on time, every time. Late or missed payments are noted on your credit score and are black marks. When you’re trying to establish good credit, you want as few black marks on your credit rating as possible.
If it’s your first car loan, you may want to start with a low-priced car. The interest rate may be slightly higher than you’d like, but it won’t be that way the next time around if you maintain a good credit score. After a year or so, you can trade in your car and buy a different one at a higher dollar amount and a lower interest rate in most situations.
If you’re looking to establish good credit and need a car, let CarUp KC help. We’re in the business of getting good people into good cars, whether they have good credit, bad credit, or no credit. Call us or stop in today to apply for your car loan.