How to Achieve Your Dreams by Building a History of Good Credit

Good credit is almost as important as what's in your bank account when it comes to achieving what you want in the world. Large purchases, such as property or a house, and even smaller purchases, such as a car, are largely dependent upon your financial standing with regard to credit available. There are many tricks to building a strong foundation of good credit. Strangely enough, not carrying any debt can actually hurt your credit score. Whatever your dreams may be, using credit responsibly to build a history of good credit can lead you to fulfilling them.

Instructions

1

Apply for a low-interest credit card if you don't have a credit card already. Look for promotional offers such as 0 percent interest for the first six or 12 months. Accept the lowest credit line at first. The company will probably extend only a little credit to you if you are a new user.

2

Create a budget for your monthly expenses. Do not count your credit line as actual money. Base your budget on your income. Make small regular purchases on your credit card, such as groceries or some low-expense utilities.

3

Pay off your credit card on which you've put only expenses that were already built into your budget. Pay your credit card down once a month. Allow your account to carry debt for a small amount of time, but always pay it off. This is one of the fastest ways to build a solid credit foundation.

4

Create a calender on which you can manage and chart your credit card payments. This is especially useful if you have more than one credit card. Avoid missing a payment as this will quickly compromise the stability of your credit standing. Keep your credit used to credit available low, as this is a major factor considered when computing your credit score.

5

Pay all bills on time. Add all monthly bill payments to the financial calendar you created to manage your credit card. Set up automatic payments with your bank account or your credit card to help ensure that payment deadlines are met monthly. Develop a history of on-time payments to signal to creditors that you are reliable and responsible. This history of regular payments will impact your credit score and your financial stability positively.