Wednesday, 13 December 2017

How To Build Personal Credit For Any Investment You Want

Written by Posted On Wednesday, 06 December 2017 16:52

Having a good credit score makes it easier to obtain fair loans and make major purchases at a lower cost. The cost of expensive purchases can increase with bad personal credit. And having no credit score isn't any better. In fact, many people consider having no credit worse than bad credit. Below we will discuss how you can build personal credit for any investment you want.

Start with a Secured Credit Card If You Have No Credit or Bad Credit

People who have no credit or bad credit are often declined for credit cards. If you're in need of a credit card to start building personal credit, you can obtain a secured credit card. The way this type of credit card works is you give the company a deposit of around $200 and then they give you the card. If you don't fall behind on payments, then they'll refund your deposit after a certain time period, such as six months.

 

Unfortunately, it's possible to be declined for a secured credit card even when you have enough for the deposit. Some options in this scenario for building credit, as explained by NerdWallet are asking your bank in person for a secured credit card, applying at a credit union, obtaining a share-secured loan, and obtaining a no credit check secured loan.

 

Pay Credit Card Bills on Time

 

A good habit to develop is paying credit card bills when they arrive. This helps prevent the problem of late payments. Don't wait until the last second to pay your credit card bill. Paying your bills on time raises your credit score. Failing to pay on time can hurt your credit score. According to The Balance, 35% of your credit score is making payments on time.

 

Apply for a Good Credit Card That You're Likely to Receive

 

Don't blindly apply for credit cards or else you'll damage your credit score. Applying for a credit card lowers your credit score. This is why you must take extra care to ensure you apply for a good credit card that you're likely to receive. How do you know if a credit card is good? Look for major credit cards with low interest rates. Major credit cards build credit scores faster. And low interest rates decrease how much money you owe the company if you miss a payment. Ideally, you'll never miss a payment, but emergencies sometimes occur.

 

Open Bank Accounts

 

Having several checking and savings accounts can help you get a credit card or an investment you want. Maintaining several checking and savings accounts makes you look financially stable to lenders. However, don't open too many accounts or else it will backfire. Only open as many as you can successfully manage to give your personal credit a boost.

 

Obtain a Common Car Loan and Stay on Top of Payments

 

Another good way to build credit is to obtain a common car loan and stay on top of payments. By the time the car is paid off, you'll likely have a good credit score or at least a higher one than before. You'll also have the possibility of obtaining a car title loan once the car is paid off. This comes in handy if you ever need the extra money. If you paid off a car loan without any late payments, the loan stays on your credit report as positive history for 10 years since the date it was paid.

 

You can build personal credit for any investment you want by paying your credit card bills on time and paying off a common car loan without any late payments. It shows the kind of financial responsibility that lenders and sellers look for. A high credit score allows you to get the best deals on major purchases. Bad credit scores make it difficult and more expensive to get loans and make large purchases. By following the tips outlined above, you'll be well on your way to an excellent credit score regardless of where you're starting.

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Sofia Belnap

Sophia is passionate about writing in the real estate and home improvement spaces. When Sophia is not writing she loves reading, cooking, and spending time with friends and family.

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