How To Start Building Your Credit

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

If you've ever sat with someone as they applied for a credit card or loan or you've tried to do so yourself, then you likely have a good understanding about how important credit is. Ultimately, in order for a lender to determine whether or not you're a dependable borrower, they're going to look at your credit report and score to learn about your payment history, your outstanding debts, and so much more.

Now, for those who are just taking on their own financial responsibilities for the first time, a common question is how can you get your credit score where it needs to be? This certainly makes sense, considering that without any credit history lenders may be more hesitant to hand out a loan - and that, as you may know, turns into one big vicious cycle of trying to establish credit in the first place.

We have good news for you today, though - there are plenty of approaches that you can take to begin building your credit and get it to where it needs to be in order to qualify for car loans, mortgages and more; some include:

1. Apply for a secured credit card: since secured credit cards require the borrower to put down a cash deposit, these can be much easier to get when you have no credit history to prove your dependability.
2. Apply for a student credit card: lenders know how important it is for young adults to start building credit, which is why many will offer credit cards specifically for this age group.
3. Ask to be an authorized user: if mom or dad feels comfortable, having your name listed as an authorized user on their credit card can help establish some credibility for yourself.
4. Make your payments on time: once you're approved for a credit card or have other debts in your name (such as student loans), make sure you're sending payments in on time, 100% of the time.
5. Keep credit card debts low: just because you're approved for a credit card doesn't mean you should max out your spending limits. In fact, it's recommended that you keep your balance at or under 30% of your credit limit.

Like we said earlier, having good credit is extremely important in order to take on larger financial responsibilities in the future, so if you have yet to do anything to build yours, start today!

Still have questions on how to do so? Contact our team by calling (516) 932-5130 or email us at info@americaninvestmentplanners.com.