A good credit score and profile are necessary to navigate life. Therefore, you’ll need to know some strategies for building your credit if you’re new or have a negative score. The following are some effective tips you can use:
1. Use a Cosigner for Your Student Loan
You can use your need for a student loan to help you build your credit if you’re seeking an education. What you can do is apply for private loans with a cosigner to fund your education.
A cosigner is a person who has an excellent credit score and is willing to take responsibility for your student loan if you default.
Each payment you make on your loan will be recorded on you and the cosigner credit reports. According to Ascent, “…many people use this method as a successful way to build credit.”
2. Build Credit With Your Rent and Bills
Nowadays, new options are available to people who want to build their credit. You can boost your score even if you don’t have a credit card, home loan or mortgage.
Certain services are available that will allow you to have your rent and utility payments placed on your credit report. Experian Boost is an example of such a service.
The payments you make to HBO, Verizon, ATT and other companies will go on your credit report and may boost your score significantly. Other services are available if you’d like to use your rent payments to build credit.
3. Get a Cosigner’ Cosigner Help With a Credit Card
You can also apply for a credit card using a cosigner.
Not all credit cards will allow you to do this. Examples of companies that do are Bank of America and US Bank.
There is another option if you can’t get a cosigner for a credit card.
You can have someone you know put you on his or her account as an authorized user. The timely payments will go on your credit report still.
4. Get a Secured Card
Another option for you is to apply for a secured credit card.
A secured credit card is secured by the money you send to the card issuer.
Your available balance will usually be equal to the amount of your deposit.
Your secured card will work the same way as a regular credit card, and you’ll receive your funds back if you make timely payments for an extended period.
5. Get a Credit Builder Loan
A credit builder loan works using the same concept as a secured credit card. The difference is that it goes on your credit report as an installment loan rather than a revolving credit line.
You will send the issuer money equal to your loan balance, and then you will pay the loan. The lender will store the funds in a bank account and report your payments to the credit bureaus. You will build your credit with each timely payment, and you’ll receive your funds back when the loan period ends.
Now you know of some effective ways to grow your credit score. The above-mentioned tips will work for you whether you have an established credit history or you’re new to the credit world. Give some of them a try and record your progress over the next few months.