Great Credit For Cheap

The best way to build up good credit is to use credit cards. If you’re in college you should be receiving regular offers for cards. Get a couple of them.

This is the key to properly using credit cards. First off you’re not using them to borrow money and you’re not using them to buy things you can’t afford.

You use them to make the purchases you were going to make anyway and then you pay them off in full every month. This does a number of things.

I’m sure most of you know someone who always is about a week behind with money. You know who I mean. They give you a check but ask you to hold it. Well with credit cards you get 25 days to pay (actually up to 55 if you make a purchase on the last day of the billing period). so this helps you spread things out a little more evenly.

The second thing is this will show up on your credit report as an open account that was always paid on time, a good thing. Another consideration is that how long you have had credit is part of how your credit rating is calculated. So the sooner you have an open credit line and the longer you have it open the better.

Periodically the issuers may offer you a higher limit to your cards. Take it. Part of your rating is based on what percentage of your available credit you’re using. As a rule of thumb never use more than half your available credit on any one card and try to keep your overall usage to less than 30%.

If you’re not in college and not getting credit card offers then things are a little more complicated. It’s possible you already have negative items on you credit reports.

Go to http://annualcreditreport.com and request a free credit report. There are three reporting agencies and each of them is required by law to give you a free report.

The reports will be complete but will not include a FICO number. They’ll try to get you to pay for the number. I wouldn’t bother. Look over your report and make sure everything is correct. If there are errors follow instructions to correct them. This is a very slow and lengthy process. Just make sure you’re heading in the right direction.

When you start looking for credit cards remember that store cards are actually the hardest to get. If you’ve already messed up your credit you might have to get a card that has a fee. Avoid this if you can but you need to start putting positive things on your report.

Good luck.