What is the Easiest Way to Build Credit From Scratch?

Approximately 21% of the American population has a credit score above 800, which is where you eventually want to be. This three-digit number talks a lot about our financial health.

Why is it important to have a good credit score? A good credit score has many benefits like lower interest rates, quick loan approval, and better rates on insurance. From lenders to landlords, your credit score helps them to predict the chances of you making payments on time.

So, what happens if you have no credit at all? Though there are loan options with no credit if you have not yet started to build credit, you should always try to build a good credit history on your credit reports.

There are several different methods that you can use when starting to build credit. Keep reading to learn the easiest way to build credit from scratch.

The Easiest Way to Build Credit 

When thinking about how to start a credit history, it might be a bit overwhelming. Let’s look at some simple ways to build your credit.

1. Have a Look at Your Credit Report

You’re probably thinking, “I haven’t built any credit yet. How do I have a credit report?” In reality, you may not, but it is good to check. Look for signs of identity theft. Someone may have opened accounts in your name.

Even if there are no signs of identity theft, make sure that your biographical information is correct. This information is what the credit bureaus see, so it is important that it’s accurate.

2. Get a Credit Card 

Sounds like an oxymoron, right? How can I get a credit card, if I don’t have a credit history? There are a couple of ways:

A. Secured Credit Card

A secured credit card requires you to give a cash deposit that covers your payment in the event that you miss a payment. Try to find one with no annual fee and verify that they report to the three major credit bureaus.

B. Student Credit Card

These cards are designed for younger people with little or no credit. They have low credit limits and high-interest rates but will help you build a credit history.

C. Store Credit Card

Do a search for the easiest store credit card to get with bad credit or no credit. If used correctly, a store credit card can save you money on the things you buy anyway and help you build some credit. Remember though, that the interest rates are high, so aim to pay if off each month.

3. Pay Your Bills on Time! 

Can’t stress this enough. Nobody wants to lend money to or do business with people who don’t pay their bills or don’t pay their bills on time. Payment history is a large part of your credit score.

Make small purchases on credit that you know for certain you can pay off on time.

Getting Started

Now that you know the easiest way to build credit, it’s time to get started. It may take a little bit of time, but in the end, it is so worth it. Having good credit makes certain aspects of your life much easier.

While you are still in the process of building credit and find yourself in need of money, there are fast, easy and hassle-free loans offered to those with low credit. Keep your list of loans ready which can help you in times of emergency.

Image source: GotCredit.

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