how do i build up credit?

Question

I want to purchase a home and i dont know how credit or anything works? what is a credit score? how do i build it up?

Answer 1

Go to www.annualcreditreport.com . The credit bureaus have come together and built this site to answer your question. Others may post other websites that will rip you off. You can verify this site by going to one of the bureaus at www.experian.com and they will have that link on the bottom of their front page.

Next, to build credit, the best way is from a secured credit card from a real bank. You will basically pay - lets say $300 and will get a card with a $300 limit. Put a small amount on it each month, (I do groceries) and PAY IT OFF COMPLETELY EVERY MONTH. After 3-4 months then apply for a regular unsecured credit card and do the same thing until you have about 3 credit cards you only make small purchases with every month. Your score will go thru the roof. If this is the only thinbg onb your credit, the score should be in the 700's in no time.

Mortgage companies will be offewring you very good interest rates.

Just be careful not to buy anything on a credit card that you dont already have the cash for. Its an easy trap to fall into, and if you do, you may end up; in debt up to your eyeballs.

Good luck!

Answer 2

First, in the US you can get 3 free credit reports per year (once per year from each major credit report company) at www.annualcreditreport.com Go there and order a free report from one of them and see what they've already got on you. If there are any mistakes you can get them to change them. If there are bad things (late payments, bankruptcy, etc.) that are true they won't remove them, but may let you write an explanation to be included.

You improve your credit by using credit wisely. Paying bills late lowers your score. Having a credit account (credit card, car loan, mortgage, etc.) and paying everything on time increases your score. Carrying a balance on a credit card may or may not hurt your score, but it's unwise from a financial point of view to be paying the high interest rates they charge.

When trying to get a home loan your credit score will be part of what the lender looks at. They'll also look at your income and bank account balance (you're not going to get a loan for a million dollar house if you've got a $10,000 per year job and nothing in the bank).

Answer 3

Open up a CD and borrow against it. Make sure that you make the loan payments on time. Then you will build your credit rating as well as establish a relationship with your bank.

Answer 4

open a credit account. use it & pay on time. your history should be in a good shape within few months

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