Do you need to establish or repair your credit?
These days, it’s pretty difficult to live without credit. Unless you have cash, you can’t buy a home without credit. There are already gas stations that don’t accept cash. Some checkout lanes in stores are marked for credit purchases only. And in my opinion, that is a trend which will increase. The minimum wage is rising. In order to stay competitive and profitable, retail establishments and many restaurants will have no choice but to automate. If your credit is good and you have credit cards, you’re in good shape. But what if you have either no credit or bad credit? Here’s a few ideas on how to repair or establish your credit.
Secured Credit Card
With this you make a deposit to the bank issuing the card, and you get a card with a limit of the deposit. As long as you make your payments on time, you’ll start to build a good credit history.
Similar to the secured credit card, this is a personal loan. You make a deposit to a bank, they loan you back the amount of the deposit and you make monthly payments.
Get a co-signer
Have someone with good credit co-sign for your credit card. Hint – try Mon or Dad.
Be Authorized on someone else’s credit card
This is similar to getting a co-signer. However, not all banks will report your authorized activity to the credit bureaus.
Develop Good Habits
Make your payments on time. Not only credit cards and loans, but your rent and utility bills. Try to pay the credit card bills in full. However, if you must carry a balance, keep it under 30% of the credit limit. Make more than the minimum payments. Don’t open too many accounts at once. Part of your credit score is the length of time the accounts are open. By opening too many, you’ll decrease the average length.
This won’t happen overnight. It usually takes at least 6 months of on-time payments to Establish or Repair Your Credit. But, if you develop good habits, you’ll be in good shape with your credit. Then, when you’re ready to purchase a home, contact us.
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