Build Your Credit

Author: Tammy Doss

When you are starting out and need to build credit it is important to understand that using a debit card does not necessarily help you.  Although, for the most part you are doing the right thing to pay in Cash – which is what a debit card does since it is attached to your bank account and literally pulls cash from that account.  However, paying this way doesn’t help you with building a credit history.  So here are some basic steps that may be advantageous for you as you navigate this process.

One of the easiest ways to get a credit card is to get a gas card or a retail store card. Or this may seem super simple but buy something like a mattress or if you have extra resources, a car.    Once you are approved, which may be as simple as providing proof of employment, a pay stub and proving you have no other debt or very little you are on your way.

The key now is to make every payment on time with no exceptions.  Creditors are interested and delighted to have a person who pays their bills as agreed to on time and within the payment period agreed upon when you sign a credit application.

Having more than one credit card or obligation is also a positive way to build credit.  Creditors like to see you can manage the credit that has been afforded to you and pay and keep up to date on more than one obligation.  Just don’t let it get out of control.  If you are renting an apartment this is also a way to show credit worthiness.  Your landlord can vouch for you that you pay your rent on time and are a good tenant.   

This in no way means go crazy and get in over your head.  Choose carefully what you want and hopefully need to purchase.  Having more than one payment is simply showing the creditors that you are willing to pay your debt as agreed to when you sign the document that holds you responsible for the debt.  Remember, it is DEBT! 

You can do it, and you can take responsibility for the debt you incur.  Be sure you are getting the most bang for your buck and carefully check the interest rates that are associated with borrowing.  As you know credit is a loan.  It comes with strings attached.  Negotiate the best interest rates, know your rights and know you are responsible for the payments associated with the debt you are incurring.  HINT…… pay it back as soon as possible to avoid further interest fees.

Your credit history reflects how you manage money and responsibilities.  Protect it as it will follow you through the rest of your life.  Best wishes on your credit journey.