Having good credit is a necessity in life. The credit you have is going to determine whether you can get a home, buy a new vehicle, and it can even affect the rates that you pay for insurance. That is why everyone should be reading the guide to good credit in order to ensure that you are doing everything that is possible to ensuring good credit.
Start Working on your Credit Early
You want to start as soon as possible to start building your credit. For those who want good credit, then starting when you reach the age of 18 is the best decision to make. Many people think that they cannot start to get good credit until they are older, have a job and the like. However, that is not the case. Here are some of the ways to starting on the guide to good credit:
- Secured credit cards are a great starting point for those who have no credit or who have bad credit. These types of cards are secured by a cash deposit, which is the credit limit for you.
- Cards that are geared towards students are a great way to get in on obtaining a good credit history.
- Retail cards can be easier for people to get, as companies are usually ready to lend out their line of cards to anyone. With this being said, they usually come with higher rates and lower limits, but they allow you to start establishing credit.
Always Pay on Time
This tip comes as no surprise to those who looking for the guide to good credit. Paying your bills on time is one of the best things that you can do to ensure that you are seeing results from the credit that you do have. Whether you pay your bills on time is going to communicate to future lenders whether you are a risk or not when lending credit. Just one payment not on time can greatly lower your credit score. With this being said, here are a few ways to ensure that you remember to pay on time:
- Set yourself an email reminder when the payment is due for your cards
- Try to see if your lenders will work with you on a due date and get all your due dates for the same day
- Set up automatic bill pay to ensure that you never miss a due date
Do Not Apply for Credit in Huge Batches
Each time that you apply for credit, this is putting a mark against your credit report. Therefore, be sure that you are spacing out the number of credit approvals you try to get. These hits on your credit report are referred to as hard inquiries. There are times in which certain credit applications do not hit as hard, for example if you are shopping for a car loan or a mortgage. In these cases, creditors understand you are looking for lower rates, and they are often treated as just one hit to the credit report. In a guide to good credit, the lower the number of hits on your credit report the better.
Avoiding Maxing out your Credit
When several people get a credit card for the first time, they are tempted to use this and use it some more. They use this to the point in which they are maxing out the card. When looking at a guide to good credit, maxing out the lines of credit you have is a huge no-no. Keep these tips in mind about credit:
- You want to use no more than 30% of your total credit line that you have been given
- The higher amounts you have on cards, indicates to lenders that you may be unable to pay, thus you become a risk for credit
- If you are at the point in which your cards are maxed, check to see if you can get the lender to increase your credit, or simply use the card less and pay more on the payment
Always Check your Credit Reports
The credit report is the main key in a guide to good credit. Your credit report is like your report card on your credit. You will want to check this frequently for how well you are not only managing your lines of credit, but also for credit inquiries and your total score. Through checking your credit report you can also ensure that you are being proactive on monitoring for identity theft, which is becoming more and more common.
In order to get good credit, people must understand the guide to good credit. Otherwise, the actions that a person makes could be controlling their credit rating. This is going to ensure that when the time comes that you need a line of credit for a major purchase, you will be able to get this without any worries.