How to Make your Credit: From No Credit to Have a Good Score

How to Make your Credit: From No Credit to Have a Good Score

If you have never had a credit card or loan, your history is blank at the credit bureaus. Bureaus or agencies have their history of credit consumption in forms of cards or loans. These agencies know the ways you pay your bills, if you are in delinquency with banks or credit companies and the amount of all your debts. This data and personal information is centralized in the main credit bureaus or agencies.

1. Open a Bank Account - to build your credit when you have never obtained loans or credit cards it is important to start with a small bank account. This account is not required, but it establishes a good sign in your history, this means responsibility in your finances. Avoid having overdrafts in your account.



2. Apply for a Guaranteed Card - this card is NOT equal to a debit or prepaid card. Pre-paid or debit cards do NOT represent credit extensions. They offer convenient ways to manage your funds and pay your bills, but they are not reported to the credit bureaus.

A guaranteed card requires a deposit, usually between $ 300- $ 1,000. This deposit is a collateral to guarantee your expenses with the card. Many banks offer credit program through guaranteed cards. Your history using a guaranteed card is reported to the credit bureaus, this helps you build your credit history.

3. Use your secured card with care - just spend what you can pay in full monthly and pay on time. Do not use all available credit. Generally when using only between 10-30% of the credit line this means a positive signal in the bureaus. This is a good opportunity to show the banks and credit companies that you can handle your debts consistently and positively.

4. Request a store or gas station card. These cards are the same as traditional cards, but they can have high interests. The credit cards of the stores and gas stations are reported to the credit bureaus, so you can make a history using it. But, it is preferable to obtain a card with lower interest if possible.



5. Order your credit reports - after using your credit for six months, review your report. Pay attention to the information in these reports and your score. Verify positive activities and especially if there are negative activities in these reports.

6. Get a Traditional Card - an unsecured card does not require a deposit or collateral. Traditional credit cards also offer credit lines that can be higher than the guaranteed ones.

7. Wait between 12 and 18 months to apply for a traditional card (not guaranteed). If you use your credit responsibly and pay your bill on time, this is enough time to show that you can handle your debts without the need for a deposit as collateral. This is a good time to change the credit card guaranteed by a traditional card.