4 Methods to Build Credit for Starters

By: Dustin Verley

Building credit is thought to be a hassle in the eyes of some young people. But it doesn't have to be intimidating. Imagine getting lower interest rates, being eligible for smaller down payments and so much more, all because of three little numbers that allow lenders to trust you more easily. To my international readers, building credit is probably something you've never heard of so this doesn't really effect you.

But for my U.S. readers, this article will definitely give you insight on how to build your credit through 4 different methods. So without wasting your time, let's start talking...

1) Checking Accounts/Debit Cards
Many people were probably expecting credit card to be the first recommended method. Unfortunately I am going in order of what I'd choose first. With that being said, I would choose checking account/debit card first seeing how it builds credit slowly but surely.

Keep in mind it doesn't build credit as fast as a credit card would, but the management of a checking account compared to a credit card (which many young people would abuse) is more simple. The minimal risks with a checking account compared to a credit card can also be looked at as an advantage.

Just remember to check your account balances and statement twice a month, keep your account well funded and avoid any NSF fee's or overdraws.

2) Bill Paying in Your Name
Building credit can also be as simple as paying bills in your name. Your CableTV bill, your telephone bill, your cell phone bill, your electric and gas bill, etc. All of these bills usually report your bill payments to the credit agencies.

So the next time you decide to get a cell phone plan, remember that getting it in your name and making timely payments will contribute to the building of your credit.

3) SECURED Credit Card
Notice that I stated a SECURED credit card over a UNSECURED. The difference is that in order to use a SECURED credit card, you only use whatever amount your account has. Do not confuse this with a prepaid debit card as the money that is in your account is mainly collateral that will be deducted if you fail to make a payment.

I am not solid on the information of a SECURED credit card but what I stated above is the basics and I know for a fact that SECURED is more better then UNSECURED. If you decide to get a UNSECURED, I'd suggest getting one that has a credit limit of $300 and 10%-15% APR interest rate. Possession of a UNSECURED credit card can make things tempting and that's why many youth are in debt now. Added in the with credit card crisis going on across America now, no more credit card debt is needed.

4) Apply for a Small Loan from Your Bank
Some banks offer small loans to some people. If your fortunate enough to get one of those small loans, make sure that you understand the terms and agreement before signing the contract. Make the payments on time and pay it off early if possible (and if there is no penalty.) Doing so will definitely boost your credit significantly.

SO, THAT'S IT... 4 METHODS TO BUILD CREDIT FOR STARTERS!

Now, there are countless other ways to build credit but the 4 above are my primary methods that will boost your credit with none to minimal risk of going and running into problems. Some of those would be Payday Loans, High Credit Line Unsecured Credit Cards, etc. Use wise judgment and you'll make it far, use poor judgment and you'll be in debt taller then Shaq.

Last note: Don't forget to periodically check your credit report and credit score for any flaws and for any that doesn't seem right or is not matching your records, contact the creditor immediately to obtain further information. Adjusting these errors can be found on other sites or in future articles here on CashTalkz.net

Good luck to all the new starter's and use them tips wisely, they will effect your future. Also, here is one rule of thumb for everyone that is in bold and underlined for importance:

CREDIT STAYS ON YOUR RECORD FOR 7 YEARS AND CANNOT BE REMOVED UNLESS SETTLED AND AGREED TO BE REMOVED BY THE CREDITOR.

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