Credit is needed by most individuals in order to feel secure. We all strive for that feeling of security. The road to obtaining the credit you need to feel secure is not an easy one; in fact it often looks more like unfamiliar territory. Along the road to good credit here are a few of the bumps and potholes you may have to swerve around in order to avoid an unfavorable encounter.
In order to build credit you must first receive it. This sounds simple enough with so many options open to get credit right? Wrong! Often if you have no credit history it is difficult to get companies to allow you to prove yourself as credit worthy. Most companies will require a co-signer or collateral for a new client with no credit history. Credit cards will either strictly deny you or charge you high interest and a yearly fee. Before you begin applying for credit consider your options and what you need credit for. If you want to buy a car a credit card is not going to help you where as if you want something to stash in case of emergency a credit card might be just what you need. Only apply for the credit you need. You do not want a lot of loans open you just want something to start you on your way.
Once you have a loan or credit card you are going to have to be responsible. If you have a credit card you must use it but you must do so wisely. An open account with no activity may show you have an account open but it does not show any type of responsibility. Once you begin using your means of credit make sure to pay all bills on time. Pay them a week in advance if possible to be sure that you are never late. Waiting until the due date can sometimes result in payments being posted the day after they have been received. When you pay your payment make more than the minimum payment if possible. This greatly affects credit scoring. Many believe a quick payoff boosts their credit score but this is not true. Showing great responsibility over a drawn out period of time is the best way to improve your credit score.
Once you begin using and making payments on your credit you are well on your way to more credit offers. Once you have shown responsibility toward your debt credit card companies may lower interest and yearly fees. If you continue to show a good reputation with your credit yearly fees may be completely dropped. If you decide to take a better credit offer than you currently have make sure to close the old account once you have your new card. This will allow avoiding being tempted to use both means of credit. This will also keep the amount of accounts that you have open to a low number adding to your likeness of a better credit score.
If you can manage to find someone willing to give you credit responsibility goes a long way to having good credit. Good credit is a difficult task because so many people lack the discipline they need in managing their spending power. Be wise when using credit cards or borrowing money. Use credit cards just enough to build and maintain a credit history. When taking out a loan borrow only the amount of money you need. Being careful with the credit you have will lead you on your way to the road of good credit. It may not be a vacation on the way but once you arrive you can enjoy the scenery.