Are you in the process of building your credit score from scratch? While everyone has to start somewhere, this can be a frustrating place. Fortunately, there are a variety of steps you can take to establish credit sooner rather than later.
Here are three of the absolute best ways to build credit for the first time:
- Use a secured credit card. While an unsecured card may be what you want, don’t shy away from one of these offers. With a secured credit card, you make a cash deposit that acts as your credit limit. As long as you use the card in a responsible manner, you’ll soon realize that your credit score is rising. Soon enough, you can trade in your secured credit card for an unsecured one.
- Find a co-signer. This is easier said than done, but it’s one of the better ways to build credit for the first time. For example, ask a parent with good credit if he or she will co-sign on a loan or credit card. This helps you receive an approval, thus putting you in position to use the loan or credit card to build your score.
- Rent an apartment. There are a variety of rent reporting services that ensure that this payment ends up on your credit report. So, as long as you make your payments in full and on time, you’ll begin to establish good credit.
Building credit for the first time can be frustrating, as some lenders won’t want to take a risk on someone in your situation. By using one or more of the tips above, you’ll find yourself in position to not only build credit but to also feel better about your financial situation now and in the future.
Once you find yourself on the right track, your forward momentum should be all you need to carry you for the next few months.
What steps did you take to build credit for the first time? Did you make any mistakes? Did one strategy work better than the rest?
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