People often start building their credit score with credit cards. When you make regular payments on a small credit limit, lenders will be more likely to lend you more money. Before you open an account, make sure you don't already have too many open credit lines or do anything else that could hurt your credit.
Choose a good card.
Consumers can choose from a variety of credit cards from credit card companies. There are student programmes that don't need a co-signer...
People often start building their credit score with credit cards. When you make regular payments on a small credit limit, lenders will be more likely to lend you more money. Before you open an account, make sure you don't already have too many open credit lines or do anything else that could hurt your credit.
Choose a good card.
Consumers can choose from a variety of credit cards from credit card companies. You can find programmes for students that don't need a co-signer or proof of income. This is a great deal for your first credit card, but the rates on these cards are higher.
You can also find cards that give you cash back or other perks. The trade-off is that rates will be higher. But if you plan to carry a balance, you can find simple cards with low interest rates. Make sure that the credit card programme you pick fits with your financial goals.
Start Small
When you're trying to build your credit score, you should start small. Open one account and use it to buy something at least once a month. This can be something you buy often and pay cash for. The idea is to borrow money and then pay it back. Your credit report will show every time you make a payment.
Lenders will also look at how often you pay back what you borrow. So using your card once a year and paying it off in full that same month won't help you much. Your credit report shows your payment history from the past three years, and lenders want to see how you pay.
Don't use your card up to its limit. Only use a small amount of your credit to show lenders that you don't put yourself in bad financial situations.
Keep up with your credit.
Paying your bills on time is just one part of your credit score. You should also take care of your credit. If you have dozens of accounts, close the ones you don't use. When you buy a home or car, you can get more of a bonus if you have less open credit.
Also, make sure to use your free credit report every year. Check it to make sure that the information about your credit history is right. If you find any mistakes, talk to your lender about how to fix them.
