Building a good credit history early on is critical to being able to financially afford some of life’s big ticket items later on, such as a car or home. Most people do not have the means to purchase such expensive items with cash and will require either a loan or mortgage to do so. So how does one go about building their credit history? You have to borrow money and prove that you can pay it back. Building your credit history can seem daunting when creditors generally do not give credit to those with no credit history. There are ways around this catch-22. If you are a student then taking out a student credit card is a good way to start. Otherwise, you can always open a checking account and pay for everything using checks. Another option in starting to build your credit history is applying for a retail or gas credit card. Getting your name onto bills as soon as possible and paying them on time is one more way to begin building a positive credit history. For those who have a lot of equity built up in their bank account another suggestion might be to ask for a small bank loan by putting your savings up as collateral. However you choose to do it, there is no better time than now to start building your credit history. Unless you are assured of inheriting your fortune, chances are that at some point in your life you will need to borrow money and when that day comes you will need to have a solid credit history to make creditors feel safe about loaning you the money. It may take a few years to build your credit history, but it is crucial for your future financial health.
September 11, 2021
September 10, 2021