See below for his five quick tips on how to build your credit. You can also follow his blog at http://www.nathanrichloans.com/blog/.
Building and maintaining good credit is one of the key components to being able to borrow money for large items such as a home or a car. Your credit history begins with your first credit account, and each transaction you make going forward and how you pay your bills impacts your credit score. In order to maintain a good score, you must use your accounts responsibly.
Here are five quick tips on how to build your credit:
- Only borrow what you can afford.Making a habit of only borrowing what you can afford will ensure that you can pay the money back in a timely manner. This allows future creditors and lenders to know that you are a responsible borrower.
- Only use a small portion of the credit you have available. Maxing out your credit cards is never a good idea when you are trying to build credit, especially if you do not pay off the entire balance each month. Experts say that it is best to stay below 50% of your credit limit, but under 30% is even better.
- Start with one card. With all of the credit awards programs available, it may be tempting to open multiple cards in an attempt to rack up points. Fight the temptation and begin with one credit card. The more credit you have available, the more you may end up using, which, in turn, makes it difficult to pay off the bills each month. Learn how to be responsible with one account before you open others.
- Make payments on time. The timeliness of your payments may not show up on your credit score, however if you don’t pay your bill and are sent to a collection agency, it will take a major hit on your score. The best bet is to pay your bills on time each month so that you don’t have to overcome the hurdle of a debt collection.
- Carry a balance correctly. Having a balance on your credit card is not necessarily a bad thing as long as you handle it correctly. Pay more than the minimum required each month to pay off your balance as quickly as possible. Avoid making late payments and try to keep your balance below 50% of the credit limit.
When you are ready to make the move to buy a new home or refinance your current home, I will run a credit report for you and walk you through it! Call me today to set up an appointment.