How Do I Build My Credit?
- Installment credit like an auto loan is one of the BEST ways to build a positive credit file.
- Building credit means consistently demonstrating your ability to pay back any money you borrow. Your goal is to prove to creditors and lenders that you can responsibly manage debt.
- The most important thing you can do to build and maintain a good credit score is paying all of your bills and debt obligations on time every month. Even one late payment can significantly damage your credit score, especially early on.
- Each time you apply for a credit card or loan, your credit score takes a small hit. And there’s no point to chipping away at a credit score you’re trying to build up so keep the inquiries to a minimum.
- After six months of timely credit payments, check your status by viewing your credit report and score.
- The key to building credit is patience. Remember that having a good credit score is like having the world’s best coupon book for all the biggest financial transactions in your life. It may take time to establish good credit, but once you do, you’ll reap the benefits of big savings.
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