How can I establish good credit?

Answer 1

FICO scores are derived by calculating credit behavior in five basic categories, each carrying a different degree of importance, or "weight."

Payment history: Making up more than one-third of your credit score, your payment history shows whether you pay your bills on time, the number of past-due accounts (and how long they are overdue), any accounts referred for collections, any bankruptcies, and other payment-related behavior.

Amounts owed: Not only do lenders want to know how much money you owe, they are also interested in the ratio between outstanding debt and available credit. In other words, the closer you are to "maxing out" an account, the more negative the impact on your credit score.

Length of credit history: A short credit history can work against you. It gives you no time to prove yourself!

New credit: How frequently and how recently have you applied for new credit? Many "inquiries" on your account, especially within a 12-month period, can lower your credit score.

Number of accounts and types of credit used: It's good to establish a pattern of repaying your debts, but don't run the risk of "too much of a good thing." If you have many open credit accounts and/or credit from certain lenders (like finance companies), your score may be reduced.

Follow these guidelines and you'll be on your way to good credit!

Answer 2

In debt? Pay it off. Start with the credit card that charges the highest interest. Don't consolidate debts. Call each card company and beg them to reduce the interest rate - it works.

No debt? Great,

Start with a credit card and only charge what you can pay off EVERY month (groceries?). Do not carry a balance. Do not charge ANYTHING that you can't afford to pay cash for at that moment. Don't get too high of a credit limit (how much you can charge), but after a few months raise that level.

Car payments are awful, but next time get a loan for a very short amount of time instead of paying cash. Pay this loan off quickly.

Never miss OR be late with any payments; rent, car, insurance, credit card. These will show up on your credit report.

Did you know that the computers at credit card companies scan credit reports daily and they can raise your interest rate if they find you have been late or missed a payment.

Don't cancel credit cards, just put them away and don't use them.

Answer 3

Some great ways-
Buy a CD from your bank, take a loan out using the CD as collateral. Take your loan money and buy a car. Then credit cards will start rolling in. Make a significant purchase with the credit card and then put the card in your sock drawer, don't use it any more. Pay the minimum payments on all. It takes time, but this is the best way I've seen so far. Hope this helps. Good luck.

Answer 4

make sure that you only buy what you can afford to pay off if you use charge cars. it is very easy to get into debt. make sure that you pay your bills on time and in full or at least the minimum payment. do not go over your credit limit . do not get any over the limit and late payment fees. good luck with your credit . once you are in debit it is very hard to get out of it. do not let anyone put credit cards store cards or anything else in your name. because if the don't pay it you will be stuck with it. not even a boy friend or a husband or another family member is worth the debt. you will be glad for this info . especially if some burns you with debt in your name.

Answer 5

Get a credit card and carefully with out going crazy purchase the things that you need on the credit card. But don't run up a balance because the interest rate will kill you! Make sure you can pay the bill entirely every month.

Answer 6

get a credit card. make consistent payments that are not late. do not go over your limit. if you do that along with paying off car loans, student loans, etc, you will establish good credit. just don't make the mistake of falling into debt. once you're in debt, it's very hard to get out.

Answer 7

apply for credit and then pay back on time, not too early and definately never late. Pick the kinds of credit most likely to be reported to a credit bureau. things like a credit card or a car loan.

Answer 8

Start buying things you can afford on credit that way you can establish good credit.

Answer 9

if you still don't have bad credit, buy stuff on a credit card and always pay on time.
if u already have outstanding debt, level every card to your limit

meaning: if you have 2 cards one with a $600 limit and the other $900 limit, make sure theyre both less then 50% thier limit

Answer 10

get a store credit card with a low balance and pay it off every month. then after a few months, you might wish to apply for another. it takes time, but the key is properly managing your credit (not-maxing out cards), and paying your bills on time.