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HomeBuilding Good Credit

Building Good Credit

Open a Checking and Savings Account. Build a relationship with your Credit Union. Lenders what to know if you have a checking and savings account. Not to mention, your Credit Union has the ability to loan you money.

Apply for Credit. DEPENDING ON YOUR SPENDING DISCIPLINE, START AT THE APPROPRIATE LEVEL.

Level 1:Apply for ashare secured loan. A shared secured loan is borrowing money by pledging the money in your savings account. The loan proceeds will be available, but the funds you used to secure the loan from your savings will be frozen in proportion with the loan balance until the loan is paid off.

Level 2:Apply fordepartmental credit cards or gasoline cards. These cards are typically easier to get when compared to VISA or MasterCard and come with more limitations.

Level 3:Take out asmall personal loanfrom the Credit Union. All Credit Union loans are reported to the credit bureaus, which can help you build your credit.

Don't go overboard
.
Having too much activity on your credit report may hurt your score. For example, opening and closing numerous credit cards in a short period of time will actually have a negative affect on your credit score.

Stay out of Bankruptcy. Bankruptcy is not very popular in the credit world. Once you declare bankruptcy, your credit score almost immediately goes to poor. Now it becomes more difficult for you to qualify for loans and even if you do, it’s definitely more expensive. Make sure to stay away from bankruptcy by:
  • paying all your bills on time - utilities, rent, car, credit card, etc.
  • do not max out your credit limit - keep your debt manageable.
  • start saving
Get your Credit Report. Every year you should review your credit score. It will allow you to monitor your information and stay up-to-date with your credit history (for example, if there has been any unusual items listed on the report). Each year you are entitled to receive a FREE credit report from each of these three companies:

Equifax www.equifax.com
Experian www.experian.com
TransUnion www.transunion.com
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