The following are tried-and-true credit-building strategies:
When you have a poor credit history or no credit history, it may be difficult to obtain an unsecured credit card, so you may need to obtain a secured credit card. These are advantageous because they will report to all three credit bureaus, and if properly handled (low balances and timely payments), your credit score will rise over time, allowing you to obtain a more conventional unsecured credit card. A secured credit card has a very low risk of being denied because it requires you to pay a deposit up front to protect your credit line. After 12-18 months of excellent payment history, you should be able to move these to an unsecured credit card.Do you want to learn more? click reference
Get a CoSigner for a Loan: Getting a cosigner for a loan is another excellent way to improve your credit. Having a cosigner is when someone with a decent credit background joins you on the dotted line to secure a loan. The conditions are the same as if the individual cosigning were taking out the loan in their own name, which can be very advantageous. This is a perfect way to establish credit as long as payments are made on time and in a favourable manner. One word of caution: if you default on this loan, the cosigner will receive negative marks on their credit report as well.
This may or may not be apparent, but knowing where you’re starting from is important. Do you have a credit score in the low 500s or the 600s? When deciding how to construct credit lines, knowing where you’re starting from makes it much easier to decide the direction that needs to be taken.
Since bank accounts do not report to credit bureaus, this is often ignored. But, once you begin to have a strong history of keeping your bank account in good order, you can qualify for lower interest rates on loans and credit cards from your bank. When a bank has a reputation of how you handle your responsibilities, it’s much easier for them to accept you for a loan. A bank may be able to overlook any previous credit issues or a lack of credit history if they see that there are no overdrafts and money is being handled properly, and approve you for loans that will help you create credit.
Understanding how a credit score is calculated can assist you in making sound credit decisions. The balances you carry on your credit cards when you create new credit accounts will swing your credit score upwards of 100 points in either direction. This means that if you have a history of keeping your balances low while you accumulate credit, you’ll be rewarded with a higher credit score than someone who keeps their balances close to the cap each month.
Maintain Your Credit Card Accounts: Closing credit card accounts has only one effect: it lowers your credit score. If you’re trying to establish credit, don’t close any of these accounts unless it’s absolutely necessary. Even if you don’t use the accounts much, closing them will lower your credit ratio and shorten the total length of credit history on your accounts. Just keep in mind that the longer an account is open and in good standing, the higher your credit score would be.