Simple guidelines to build credit from scratch

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Building Credit History » Simple guidelines to build credit from scratch

Simple guidelines to build credit from scratch

The content is accurate at the time of publication and is subject to change.
In today's world with tightened security, it isn't easy to build good credit. It takes time and patience from one's end to build good credit and there are no shortcuts to doing so. Many people assume that a fair credit rating is ok to live with. But it takes a few slip ups for an individual to slip from fair credit and go down further to bad credit. For instance, one simple missed payment could bring the rating down to bad credit within a matter of a few months. One needs a good credit rating for everything, starting from a home loan, a car loan or renting an apartment. The credit bureau keeps track of an individual's credit rating and the FICO scores are equally important. It is not just banks and financial institutions but even landlords who check their prospective client's repayment capacity before lending/renting out to the individual. In such scenario, the only advice that one should follow is to start early and work on building credit during the last years of college itself. Some of the ways to build credit from scratch is by following these simple rules listed below: • First take stock of the credit rating or the credit report from any of the three major bureaus such as Experian, Equifax, or Trans Union. The relevant information could be obtained from the credit report from any of these agencies and this would help one arrive at the actual scenario as to what one's rating is with these bureaus. Typically credit reports are used in order to create credit scores. One has to pay attention to the 3-digit number coding that issuers use to arrive at the creditworthiness of an individual. Lenders, landlords, insurers, employers as well as utility companies - all of them use this as the benchmark. • Bank accounts (checking as well as savings accounts) are a sign of stability. One has to ensure that a checking or a savings account is opened while still in college and work on it in a responsible manner. If the young adult is under the age of 18 one can open a joint account. • The basics that one must understand with respect to scoring is that it is of prime importance to pay bills on time (be it utility bills, phone bills etc) and use only around 30% of the allotted credit and one must ensure that one does not max out the card. This would help in getting good scores as well as keeping debt out of bounds. • The easiest way to build good credit within a short span is to ride piggy bank. Especially for young adults it would make sense to open a joint account with an adult and use their credit rating and in the meantime build one's own credit scores. This would enable one to qualify for loans and open up other options. • Never apply for credit cards while still in college. Issuers normally set up shop on campus and entice youngsters to avail a card. Experts warn that this could be worst thing for a youngster. Companies are willing to take the risk as they know that the parents would bail out their kids if they get into trouble.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Cards for Travel from Our Partners: Winter 2019 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Winter 2019 – Expert’s Choice

Posted: December 17, 2018

Nights are still drawing out, the wind is cold, and the air smells like snow already – the winter is close. Christmas and holiday season are approaching swiftly, and overwhelming gift ideas are swirling chaotically in your mind. Ready or… Continue reading

Credit Card Tips For Holiday Shopping 2018

Credit Card Tips For Holiday Shopping 2018

Posted: December 15, 2018

November and December are the busiest months as gift shopping reaches its peak. People rush around looking for the best gifts and the best deals leaving a lot of money in the shops. Holiday season may force you to go over the household… Continue reading

Credit Cards to Save More on Holiday Shopping

Credit Cards to Save More on Holiday Shopping

Posted: November 25, 2018

Discounts and special offers are available all year round. Werther you are a bargain hunter or an impulse buyer, make sure you check online discounts and special offers. Also, if you are a cardholder, see if your credit card opens the door… Continue reading

You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!