Finding a lender to approve you for a loan can be an uphill battle if you’re new to credit or “credit invisible.” Credible invisible consumers don’t have enough payment history reported to the credit bureaus to produce a credit score. Lacking credit history may not seem like a problem if you primarily use cash and have no need to borrow money. But when it’s time to finance a home or car, not having a credit history or having a¬†thin credit file¬†could be a barrier standing between you and a new house or a set of wheels. A¬†strong credit profile can also be important when you’re renting an apartment, opening utility accounts, buying insurance and even applying for a job. The good news is it’s possible to build good credit from scratch‚ÄĒand getting started today could put you in a better position to meet your financial goals of tomorrow. Here are five ways to start building credit now.

 Apply for a Secured Card
Applying for your own¬†secured credit card can be an excellent way to build credit. A secured card is typically easier to qualify for than a traditional unsecured card because it requires a deposit upfront that “secures” your credit line. The deposit you’ll need to provide varies depending on the credit card. For example, both the¬†The OpenSky Secured Visa Credit Card¬†from Capital Bank and the¬†Platinum Select Mastercard Secured Credit Card¬†require a $200 minimum deposit. With the¬†Capital One Platinum Secured Credit Card, you can put down a deposit starting at $49 for a $200 credit limit. Credit limits can also vary on secured cards, but often they are equal to the deposit amount. Some secured cards may charge an annual fee and other additional fees. If you’re considering a secured card, shop around to see which credit card best fits your needs.¬†Websites can help you find secured cards that may be right for you. Once you establish a positive payment history on the secured card, you may get your deposit back and the opportunity to upgrade to an unsecured card.
Apply for a Store Card

Credit cards offered by stores are generally easier to qualify for than other traditional unsecured credit cards. If you frequent a certain store often, signing up for the store card could help you build credit while you do shopping you planned to do anyway. One thing to be aware of: Store cards tend to charge higher interest rates than other cards. If you decide to open a store card to build credit, the best strategy is to pay off the entire balance each month. This way, you can avoid high finance charges.

Have Rental Payments Reported

If you pay rent on time each month, those payments could also potentially help you build credit. Like utility payments, rental payments are typically not included in your credit report. But you could ask your landlord or property management company to report your on-time payments. If that’s not an option, third-party rent payment services may report payments to the credit bureaus for you. These companies may charge monthly or annual fees, which is something to consider when signing up.

Building Credit Takes Time

Building credit from scratch usually doesn’t happen overnight. After opening your first credit account, it could take several months before enough payment history is reported to generate a credit score. That’s why it’s a good idea to start working on your credit before you actually need it. To keep tabs on your credit building progress, consider monitoring your credit using a credit monitoring service to get credit alerts and FICO Score updates monthly. While working on your credit, remember that slow and steady wins the race. If you keep account balances low and pay on time consistently every month, you’ll be on your way to attaining the credit you need to achieve your financial goals.

A Goal without a Plan is just a Wish.
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