Building your credit, definitely takes time and patience. In order to really take out any type of loan, whether it be a car loan, or a home loan, you will need to make sure that your credit is up to par. If you do not have good credit, there are many different tips that you can follow in order to build your credit and be on your way to excellent rates. There will be times when lenders will make loans out to people will bad credit, but you do not want to get stuck with very high interest rates.
Credit Cards and Good Credit Scores
If you have any credit cards, the first thing that you want to do is get those credit cards paid off or paid down as much as you can. Creditors will not loan money if you have maxed out credit cards. They tend to always look at the debt to income ratio. You should try writing down all of your finances to see what you can put aside every month to pay off your credit cards. If you have other type of debt, such as personal loans, etc. you may want to get those paid down as much as you can as well, if you cannot pay those off right away.
If you want to see a quick jump in your credit score, you should try to purchase items on your credit cards, but then pay off the balance in full right away. You should consider paying off your credit cards versus paying only the minimum payment required. You should also avoid spending more than you can pay back. Even if you do not have to use your credit cards, use them because you can increase your credit score rather quickly. Lastly, you want to make sure that you avoid late payments and even missed payments because your credit score will drop drastically.
Perhaps you are just curious about what is a good credit score. Please refer to our other credit score articles for an answer to this question.