How to Improve Your Credit Score

How to Improve Your Credit Score — You are extremely fortunate if you have recently graduated from college or university debt-free. However, now that you need credit, you may find that all avenues are closed to you. It is difficult to borrow money if you have no previous credit history. Even if you can’t get a line of credit right now, building one is simple. All you have to do is follow these simple steps to quickly establish a good credit history.

Establish a Bank Account

Although bank accounts are not recorded on your credit report, they are the first step toward establishing credit. Most credit card applications ask for your bank account number, and having a bank account gives you a place to keep your money and pay your bills.

Apply For a Credit Card by Filling Out An Application

Applying for a credit card is the next step. Apply for a card that you are likely to be approved for, as being denied credit can hurt your credit score. The best place to start is usually with store cards. Despite their low credit limits and high-interest rates, you are more likely to be approved for a credit card, which is ultimately what you want.

Make Timely Payments

Once you have a card, you must use it to establish credit. Purchase a few small items on your card each month that you can easily afford, and then pay off your balance on time each month. You should be able to apply for a better mainstream card, such as Visa or MasterCard, after about three months.

Budget

If you do get the card you want, make sure you stick to a budget. Bad purchases and excessive spending can quickly derail your good credit history. Remember that your credit card is just another way for you to spend the money you already have.

Make sure you can afford to repay the money you spend as soon as possible, as going into debt will harm your credit score. To stay on top of your credit debt, try to pay more than the minimum payment each month.

If You’re Turned Down, Demand An Explanation

If you are denied a credit line, you should inquire as to why, as the lender is required by law to provide you with an explanation. You can start correcting the problem if you figure out why you’re being denied. Applying for credit cards regularly and being denied will harm your credit score, so it’s critical to address any issues you may have.

You should be able to establish a good credit history in about 6 months to a year if you are patient and pay your bills on time. Maintain your good credit score by being responsible with your money and only spending what you can afford once you’ve established a credit line. This will ensure that you have plenty of credit when you need it.

Originally published at https://www.financialtips.site on August 3, 2021.