Welcome back to the Credit Rent Boost blog! Last time we discussed the numbers that make up a credit score, and just what a perfect score is (hint: it’s 850). This entry we are going to follow up with the next logical step, how to start building credit up!
building credit, credit report

Building Credit – A Strong Foundation

If you are relatively young, maybe having just turned 18 or shortly after, then you may be looking for the ways to build a strong base for your credit. Just starting out on your credit journey can seem easy, after all, you may be getting all sorts of credit card offers in the mail!  But a little bit of forethought can see your credit gains maximized!

Start Secured

Secured credit cards are backed by an initial cash deposit you make when opening the credit line. The amount is usually the same as the limit – a $300 deposit will give you a $300 credit limit. This deposit means there is no risk to the issuer of the card, hence why they are available to those with no (or bad) credit.
Secured cards can be used just like a normal unsecured one, you can use them anywhere even online. Keep paying your bill on time and you will eventually get your deposit back, as well as be able to upgrade or open a new unsecured card to keep building your credit. You can see a list of some of the best current secured credit cards at CreditKarma.

Become an Authorized User

Another way to build your credit using credit cards is to become an authorized user on a family member or significant other’s card. You will be able to use their credit card and build your credit history. Make sure that the card issuer reports authorized user activity as well, otherwise your efforts will be for naught. Of course, make sure you have a fair and understood agreement on how you will use the card, pay your share.

Building Credit – Good Habits, Good Credit

Once you’ve started your credit journey on a solid path it’s time to make sure you don’t stray from it! If you’ve already been using credit for a while and want to know the best practices to build a better credit score you can follow the same advice!

Pay 100% – On Time, Always

Paying your bill in full on time is the most crucial step, obviously. And not just your credit card! But your utilities, medical bills, anything you owe – pay on time, and in the full amount. Anything that goes delinquent can be sold off to a collection agency which will seriously damage your credit.

Avoid Overuse

Keep your credit utilization – the balance compared to card’s limit, low across all your accounts. While paying the balance in full each month is best, so long as you keep your balance below 30% you’re in good standing.
Speaking of overuse, don’t open too many new accounts at once. Each new account actually lowers your score. Having more brand new accounts than older lines makes for a lower overall age, one of the key factors in determining a credit score.

Keep Accounts Open

Speaking of overall age, keeping your accounts open for as long as possible is your best bet! Even if you don’t use the card, keeping the account open will increase the average age of your credit as well as being available in case of an emergency! If the unused card has an annual fee or some sort of cost that makes it a detriment to own, then use your best judgment.

Stay Vigilant

Each year you can request a free credit report from the big three bureaus. Take advantage of this benefit to look for any discrepancies, errors, or signs of trouble. If you want to be really on top of it, consider spreading out your free reports to one every four months, requesting from one bureau at a time.

Get Credit for What You Pay

And of course, use Credit Rent Boost! Our tools are designed to shore up our customers’ credit reports, providing a history of payments that might otherwise go unnoticed by the credit bureaus. By taking into account up to 2 years prior and ongoing, on-time monthly rent payments, you positively affect the metrics that go into generating your credit score. This is key in your building credit to where it should be!
We hope this rundown of ways to start building credit is useful for you. Doing the research and learning what goes into your credit health is the first critical step, so you’re already ahead of the pack! Now just put this information to use, secure yourself a secured credit card, become an authorized user and use your rent to boost your credit! We’ll see you back here next time on the blog.

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