How to create credit quickly • Benzinga
Building credit is not a one-time process that takes you from a low credit score to a high credit score. Indeed, building credit is a lifelong process that requires a lot of care and attention. As a result, you can build your credit in several different ways, using common sense tools like the ones explained below.
Why should you build your credit?
Building your credit is essential for surviving in modern society. Whether you like it or not, you need credit to access many things Americans once took for granted. For example, you need a good credit score for:
- Rent an apartment
- Getting gainful employment (in some industries)
- To buy a house
- To buy a car
- Open a bank account (in some establishments)
Because credit is so inextricably linked to your lifestyle, you want to build it up sooner rather than later. If you have children, you can build their credit using a few smart ways that match your search for financial freedom.
Plus, everything is a little cheaper when you have good credit. You get the best interest rates on everything big or small, making sure you pay a lot less for a range of products from cars to homes and even consumer electronics or buy now, pay later arrangements. “.
When should you start building your credit?
Start building your credit as soon as possible.
For the reader’s sake, let’s say you live with someone who sublets you a room in their apartment. You own a car that you bought for cash and you have a job that doesn’t require a job credit check.
If you start building credit now, you can save money to rent an apartment, buy a house, finance a new car, or even change jobs. According to US News & World Report, 72% of employers perform background checks. And, 29% of the time, these background checks include a credit check.
Auto financing requires a credit score that meets the requirements of the bank or lender. Before you buy a car, you can build up your credit and make sure you are approved for a loan. The same goes for a mortgage – a range of federal and private loan programs issue minimum credit scores.
Likewise, you can help your kids build credit by making them authorized users on your credit cards. As long as you make your payments on time and your credit usage is low, your kids will enjoy years of good reporting based on your credit cards. In fact, children can retain the power of these cards into the future, repeatedly benefiting from lines of credit opened before birth.
How to build your credit?
Building your credit is a multi-step process that can take many forms. Here are some examples :
Get a secured credit card
A secured credit card requires a fee to hold the card, but it still reports to the credit bureau. As a result, you can get quick approval for a card with a low line of credit and attached fees. However, the card continually earns – as shown – and helps your credit score every month. This type of debt is the best way to start using credit if you have no other way to access it.
Request a co-signer
If you have a co-signer, that person’s credit score can help you get approved for a card or loan. This method works as a good way for children to get their first credit cards, apartments, or car loans – using their parents as co-signers. The same can be true in any situation where a person with good credit co-signs someone with bad or below average credit.
Become an authorized user
Becoming an authorized user on someone else’s card will help build credit faster. As long as the card is paid on time and its usage isn’t too high, you win by showing that you are using lines of credit appropriately. This option is often seen as an easy way to build credit quickly, especially when trying to increase an already above average score.
Pay your debts faithfully
Make sure you make your payments for any debt on time or before the due date. If you’re having trouble making a payment, ask the lender or card issuer about their grace period before you report late to the credit bureau. Due to the COVID-19 pandemic, many businesses have debt relief programs that help you catch up or adjust your payments to meet your financial needs.
Check your credit report
Under the Fair Credit Reporting Act, you are entitled to at least 1 free credit report each year. However, many services have appeared that allow you to review your credit at any time through an app. Plus, the top 3 credit bureaus have mobile apps that allow you to check your credit and ensure your report is accurate.
If you discover any inconsistencies or false data on your report, contact the credit bureau as soon as possible.
Current credit building products or services
Credit creation products and services come in many different forms. Remember that most Americans use traditional methods to build their credit. However, sometimes additional assistance is required, including:
Credit building loans are often offered for small amounts to bank customers who want to build up credit. These loans can be used for anything, but they often offer the customer a taste of a line of credit. Consumers with bad credit can also use these loans to rebuild their credit. Look for banks that offer credit loans if you are considering opening an account.
Credit or consolidation advice
Credit counseling or consolidation services can help you learn how to manage your credit or consolidate old debt. Sometimes these companies can negotiate repayment rates that help you get rid of debt, but remember that paying less than the amount owed could negatively impact your credit.
Pricing and Features
About Money Lion
MoneyLion is a forward-looking digital bank. MoneyLion offers simple banking solutions to help regular consumers who need help with their finances. By “rewiring” the US banking system, MoneyLion can offer more to its customers, helping everyday people manage their money properly.
The range of products and services available on MoneyLion include:
- Mobile banking
- Cash back
- Zero hidden costs
- Financial monitoring
- Buy now pay later
You can also take advantage of several financial tools that make it easier to manage your money:
- Get paid before payday
- Investment accounts
- Credit construction loans
- Cash advances
- Cryptographic accounts
Building credit the right way
Building credit takes time, resources and patience. By using the tips above, you can build credit the right way and prepare for the future. Also, don’t hesitate to come back to Benzinga often to learn more about credit, financial products, money management and investing.
Frequently Asked Questions
What’s a good way to build credit?
What’s a good way to build credit?
Construction credit requires the approval and use of lines of credit. You can start with secured credit cards, credit loans, or co-signed applications. As your credit grows, you can become the authorized user of an account, pay your cards and loans on time, and make sure your credit report is free of inaccuracies.
How Can I Build My Bad Credit?
How Can I Build My Bad Credit?
If you have bad credit, many of the same credit building tips still apply. Although you cannot be approved for traditional loans or credit cards, you can apply for secured cards or credit loans. You can also consider credit counseling or consolidation.