How to Establish and Maintain Credit

Having good credit is very important in today’s world. Without it, it is really impossible to get any of the major things you want and need, like a home, a car, or even a simple credit card. The really frustrating thing is that, when you don’t have any credit to speak of, it can be hard to build it since most people only want to lend credit to people who already have it. Talk about impossible!  

While establishing credit may feel downright impossible, it really isn’t- difficult, yes, but impossible no. You can establish credit and then maintain it if you know a few simple “tricks of the trade.”

Consider a Credit Card

To start off with, consider getting a credit card. If you have trouble qualifying for a standard credit card, like a VISA or Mastercard, then you can try a gas station credit card or a department store credit card, which are typically more lenient about who they extend credit to.

Once you have a card- any card- in hand, then you have a chance to prove yourself “credit-worthy” and to start building credit. Start by making small, easy-to-repay purchases with your credit card, never going over your credit limit. Then, pay off those small charges by making at least (preferably more than) the minimum payment per month. Be sure to pay on time as well. This will slowly begin to build your credit score, which can help you to qualify for more credit in the future.

Pay Your Bills on Time

Another very simple thing that can help you to build credit is to always pay your bills on time, and we mean ALL your bills- from your light bill to your cell phone bill. Developing a record of consistently paying on time will improve your credit score and make it more likely that creditors will extend more credit to you.

Be Responsible

Once you have some credit to your name, the key is to be responsible with the credit that you have been extended. Continue paying bills on time. Try to always pay more than the minimum due. Never go over your limits, and don’t make extravagant purchases that you don’t need. If you can continue to be responsible, then there is no reason that you can’t continue to enjoy the good credit that you have established.