How To Build Credit When You Have None

poor credit score report with broken pencil

Your credit follows you through life, making financial situations easier or harder. 

Your credit history and score tells lenders, employers, and landlords how you pay your bills and manage your debt. They use this information to determine if they will lend you money, hire you for a job, or charge you a deposit. 

Fortunately, when you are just starting, you can take certain steps to build a good credit history and score. Taking these steps will save you money and bring you financial peace. If you are wondering how to build credit when you have none, this guide is for you. 

Use Your Credit Cards Wisely

To build credit, you need to open a credit card account. Unfortunately, many people get credit cards and use them in a way that is harmful to their credit history and score. Use your credit card wisely so you are helping, and not hurting, your credit score. 

Vary Your Accounts

One of the best ways to build credit is to vary your accounts. Part of your credit score is based on the type of credit you have. Make sure you have a mix of installment, open, and revolving accounts

Keep Your Credit Utilization Low

A great tip for how to build good credit is to keep your credit utilization low. Your credit utilization is the amount you owe divided by your total credit limit. Keeping this percentage low shows lenders you are not a risk and can handle your debts well.

Become an Authorized User

Becoming an authorized user is an ideal way to help build your credit. As an authorized user, you have permission to use an account but you are not liable for the payments. The on-time payments will show on your report as positive credit history, which will help establish your credit. 

Pay All Your Bills on Time

When you are building your credit, it can be hard to get approval from lenders. A tip for how to get credit is to pay all of your bills on time and in full. This will establish a positive payment history, which will help you when you need to be approved for credit. 

Do Not Open Too Many Accounts

It's important not to open too many accounts when you are building your credit. Each open account requires an inquiry on your credit report, which negatively affects your score. If you need quick cash, consider using a no-credit-check payday loan from a company like Bonsai Finance.

This Is How to Build Credit When You Have None

By using these tips for how to build credit when you have none, you can get a head start on securing your financial future. 

Open a variety of accounts and use them wisely. Pay all of your bills on time and keep your utilization low. Consider becoming an authorized user, and monitor your credit report and score regularly. 

Follow these tips and you'll have a bright, financial future. 

Don't forget to browse our site for more personal finance tips.

 

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