Ways To Improve Credit Score For Beginners

Improve your credit score right from the beginning. Creditors regard a lack of credit history to be the same as a poor credit history, especially if you are not a young person. Why? Creditors want to see a history of how you handle debts. If there is no information upon which to judge you, you are deemed a risk. Not fair, but true.

Creditors—they love to see the power of your “credit muscles” (your repayment history). But sometimes, as in the following instances, you have not yet built your credit muscles:

You’re young and haven’t used any credit yet; or Your old credit card spending habits got you into a lot of trouble and you cut up all your cards years ago. To avoid repeating your past mistakes, you pay for everything in cash and, consequently, your credit report is completely empty; or You think that debt is bad and have always paid for everything with cash. Many people think—erroneously—that being debt-free is a positive trait valued by lenders; or
You’re just out of a bankruptcy and you need to take those baby steps to
rebuild your credit.
A certain amount of forgiveness is granted in these situations, but not forever. There must be some evidence of credit building. If you’re a ninety-pound weakling all your life—credit wise—you’ll have difficulty attracting that special someone willing to trust you with a loan.

Ways to Add Positive Credit to Your Credit Report

1. PIGGYBACK ON A FRIEND

If you know someone (a friend or parent) who has good credit, you can “borrow” that person’s good credit listings. This friend must have credit card(s) and must trust you enough to allow you to become a “co-signer” on his card(s). Have your friend call the credit card company and request that you be placed on his card as co-signer. A copy of the card will be sent to you, but you never have to use it. (You can simply return it to your friend.) Your credit file should soon show an open account with all of the positive history that your friend has created over the years from that credit card. Remember, however, that when a new credit grantor reviews your file, he may insist that the balance on the card appear on your debt to- income ratio balance sheet. So make certain that your friend doesn’t have excessive debt, although this shouldn’t disqualify you for credit if your income is sufficient and you don’t have an excess of debt on your file.

2. GET A SECURED CREDIT CARD
Ask your local bank if it offers secured cards. Many national banks are starting to offer this service. Your past credit is less important when applying for a secured card, as you will be depositing funds into the bank to secure the credit line on the card. You can get this card even if you still have bad credit on your credit file. By putting $500 into a savings account, you will be allowed to charge up to $500 on the card. Some banks may give you a credit line that is two to three times the amount of your secured deposit. Make sure that any credit card you get is not listed as a secured card to the credit bureaus, and that it also lists your credit limit. If your card does not have these characteristics, you could actually be damaging your credit by getting one. 

3. SEEK EASY CREDIT
Many stores extend credit without tremendous regard for the credit standing of the applicant. These stores usually can be found in industries with small products or traditionally high mark-ups. Here is a list of creditors who often will extend credit to those without much credit history:

�� Jewelry stores;
�� Furniture stores;
�� Tire stores;
�� Appliance stores;
�� Gas companies;
�� Easy credit auto dealerships; and
�� Credit Unions.

Make sure that these companies report to the credit bureaus, as not all of them do.

4. KEEP YOUR ACCOUNTS ACTIVE
Once you’ve successfully received new lines of credit, it is important to have activity on them each month. I don’t suggest that you pile up large debt—maybe maintain a balance of $50 dollars or so. Pay the minimum when the bill arrives even though it will cost you a little in interest charges. And pay it on time. This is what future loan officers and other creditors want to see. (Inactive accounts with a zero balance aren’t displaying a tendency to handle existing debts.) You need to display at least one year of positive credit habits to be taken seriously, especially by a mortgage company. Start now, or you will always be a year or two from a good credit standing.

Credit Lines That Won’t Help
There are certain forms of “debt” that won’t help you build or re-establish your
credit. These include:

�� Private loans from a relative or friend. Private individuals are not
qualified to report to the credit bureaus.
�� Loans for cars from small car lots. If you are buying a car, your loan
should be through a banking institution so that your timely payments will
be reported. If you pay cash monthly to an office or individual, it will
never be reported to the bureaus.
�� Rent. Most apartment rental agencies do not have the time or money to
report payments.
�� Utility payments. Utility payments generally are not reported to the
credit bureaus and are basically useless as a form of credit.

For The User 

******Usman ahmed owner of this blog created this post with his knowledge.All content provided on this blog is not copied from any other blog and site and is for informational purposes only and  The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.