General Tips for Building Credit

If you have just been through the grueling process of credit repair, then you are probably wondering how in the world to re-build your credit and give your credit report a real facelift. Your credit report can affect your employment success, whether or not you are accepted as a renter in a house or an apartment, and it will determine if a lender - either a personal lender or a credit card company - will extend credit to you.

The reality is that there are no quick fixes to build up your credit again. It will take time, patience and strategy. But if you are serious about rebuilding your credit, there are some specific things you can do.

First of all, you should know that it will take about a year for you to properly change your credit report to a good one. Lenders will want to see a record of good payments before they take a chance and lend you money. Below are some things that you can do to improve you credit rating over the next twelve months

Make Payments On Time

You know that late payments can affect your credit rating, so you should insure that you are never, ever late on a payment again. Do whatever it takes to pay each and every one of your lenders on time - if not before.

Make sure that if you are mailing the payment, you give it plenty of time to get there and be processed.
See if your bank offers online payment options. You can use online payment tools to pre-schedule payments (and you save the cost of stamps)
Pay your bills as soon as you get them; don't let them get buried in a pile of other to-dos.
Use a scheduling program on your computer to remind you of when your bills are due.

Pay More Than You Have To

If you are paying off credit cards, you should never only make the minimum amount allowed. Instead, pay as much as you can each month. By doing this, you will accomplish two things. First, it will look good on your credit report because your balance will be paid off sooner, and secondly, you won't have to pay as much because you will reduce your interest payments with each extra bit you pay off. For a reality check on how this applies to you, download our Credit-Card-Crusher software to see just how much money you can put away if you pay off just a little more than you are now.

Get A Secured Credit Card

If you are not eligible for a regular credit card, you might consider getting a secured credit card. To get this type of credit card, you'll need to make a deposit with the credit card company or bank, and then you will charge against that amount. For example, if you deposit $300, then the limit on your credit card will be $300. No, it's not the same as getting credit, but it will allow you to show future creditors that you can be responsible and make monthly on-time payments. See our article on secured credit cards.

Get A Loan When You Don't Need One

A great way to build up your credit is to get a loan, and then make sure that you are always on time with your payments. If you can't qualify for a loan because of your credit, you should consider opening a CD account, and then borrowing against that. For example, you could invest $1,000 in a CD account, and then take out a loan for that much or less. Then, as you make your payments on time, you will accumulate good pay marks on your credit report.

Now that you have some tips for building your credit, you're going to need to know how to obtain and read your credit report. For more information, see How to Get a Credit Report and What is in a Credit Report.