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How to Build Good Credit

Building credit is like building a good name for yourself in the eyes of creditors; lenders want to see that when you borrow money you’ll pay it back in a timely fashion. In order to do that, you need to prove to lenders that you’re responsible when it comes to borrowing money and in order to do that you need to borrow some money and repay it to prove it. So how can you borrow money and build a credit history if no one’s willing to give you credit? There are lenders out there that are willing to take the risk on you and it will take time before you establish your credit history. Here are some ways of building good credit:

  1. Apply for a credit card at a department store
  2. If you’re a student, apply for a student credit card. Credit card companies will offer students low-limit cards as a way of making them customers when they become employed.
  3. Start a cell phone contract where you pay a monthly bill instead of pay-as-you-go.
  4. Ask a family member or friend that is aware of the risks and is comfortable with them to co-sign a loan with you. Cosigning shouldn’t be taken lightly because if you fail to repay the loan your cosigner will be 100% responsible for it.
  5. Apply for a Secured Credit Card, which is a credit card that is linked to a savings account or secured by a cash deposit. If you fail to make your credit card payments you give the credit card company permission to take the funds from your savings account. For example, you put forward $1000 and the credit card company will give you a credit card with a $1000 limit. This allows companies to take the risk of lending you money while allowing you to build your credit.

The key to building good credit is paying off your full balance every month. Leaving a balance on your card will mean you pay large amounts in interest, making it very difficult to pay off later. In any case, building credit is like building trust; it takes time. Once you’ve shown that you’re a responsible borrower for more than a year, creditors will be able to see that in your credit history and more credit opportunities will open up to you. If you’re building your credit or are in the midst of credit repair, contact We offer private lending services and bad credit mortgages that will help you rebuild your credit.