How To Build a Good Credit Rating Fast

If you build good credit, doors will open for you. Unfortunately, it seems as if these days you have to have credit in order to build more. Hopefully these tips will set you on the path to building good credit quickly.

Instructions

1

Apply for a credit card. Even numerous applications won't hurt you, since you have no credit score yet. Getting a credit card with no credit is much easier than getting one with bad credit.

2

Keep a high debt to limit ratio. This simply means don't charge very much on your card once you get one. Keep your purchases around 10 percent or under the limit on the card. This will help you build the maximum amount of credit points each month, which will in turn build your credit score rapidly.

3

Make your payments on time. Making just one payment 30 days late can cripple your new credit score, but establishing a record of on-time payments -- even if the payments are small -- will quickly boost your credit score. Always be sure to pay on time or, better yet, pay early.

4

Maintain only a few credit cards. Having more than three credit cards this early on can hurt your score because it gives you too much revolving debt -- even if you are paying on time.

5

Apply for a small bank loan using funds in a savings account to guarantee the loan. The bank may "freeze" your collateralized funds, and this is normal. This will give you a record of repaying installment debt along with revolving debt, which will boost your new credit score even more.

6

Remember your student loans. Many, many people have student loans. If you are included in this and you have already begun to pay yours back on time then you are already building good credit.

7

Do not drop old credit cards. Your credit score is based partly on the age of the accounts you keep in good standing, so don't close a credit card account, even if you never use it.