If you don’t have credit already, start now! Not having credit is almost the same as having bad credit. You don’t want either!
Your credit report will affect almost every important financial move you’ll make, including buying a home or a car. It may even affect your chances of getting a job, as employers can check your credit report during the hiring process.The good news is you have a clean credit slate and the chance to start off on a positive note, establish good credit and keep it there.
Here are 3 tips to help you build credit from square one courtesy of shine.com:
1. Open a credit card account.
If you’re able to qualify for a new credit card, make sure to keep your total balance low enough so you’re able to pay it off each month.
Your “payment history,” or how reliably you pay your bills on time every month, makes up about 35 percent of your credit score. Since you’re building credit from scratch, you have the opportunity to create a flawless payment history. That’s why it’s smart to keep balances low, at least at first. Starting slow and creating good credit habits early on will help you establish a solid credit score in the short-term and also maintain a good credit rating in the long-term.
If you’re unable to open an unsecured credit card (that’s the “standard” type of credit card) because you don’t yet have a credit history, don’t fret! Another avenue for establishing credit is a secured credit card. A secured credit card is just like an unsecured credit card, only you put down a security deposit up front to provide assurance to the bank or creditor that any debt you take on will be paid.
Because a secured credit card has built-in safety measures – for both you and the creditor – it’s a great option for many people who are just getting started with credit. And just like a “regular” credit card, a secured credit card will help you build credit, provided that you make all your payments on time.
2. Pay your bills on time every month.
It may seem simplistic and redundant, but paying at least the minimum payment (the minimum amount you’re required to pay) on time every month is the most important thing you can do to build and maintain a good credit score. Period.
3. Be patient.
You may have to wait about six months after you’ve opened your first credit account before there’s enough credit information on you to tabulate a credit score.