The building blocks of good credit are simple and attainable. Follow a few basic rules, and you can establish and maintain a great credit score. Setting yourself to the task today of building good credit will enable you to enjoy the most desirable long term credit scenarios. Here are 5 time-tested techniques you can implement at any time.
- Access Small Amounts Only. This is one of the most basic building blocks of good credit, but also the hardest. In our gotta-have-everything-now culture, the temptation to splurge on materials, goods, and services at the expense of your personal credit is overwhelming. Resisting this urge will provide you with years worth of excellent credit, more credit choices at lower rates and higher amounts. Aim to consistently use no more than 30-50% of your credit limit.
- Baby Steps. Remember all the times mom scolded you for eating too fast at the table? One slow step at a time is a responsible pace for building good credit. Don’t accept every card you’re offered. Envelopes arriving in the mail with pre-approved cards should be treated like the plague. Credit that is so easily acquired always has a catch. Don’t get caught out there. Read terms and conditions carefully before adding new cards to your collection. Begin with one or two cards at most. Get into the habit of managing these for a while, then add more cards down the line–or not at all.
- Better Late Than Never? Wrong! Pay on time, period. This is one of the unavoidable building blocks of good credit. Paying on time boosts your credit score, which means more credit in the future. Getting a mortgage loan or a home improvement loan depends on your personal credit score. Lenders are more likely to extend the laurel wreath of credit victory if they see you’ve run the race in a responsible, timely fashion.
- Stay In The Lines. Exorbitant credit offers are like too much dessert. Quit while you’re ahead, before you fall out of your chair in a catatonic stupor. Don’t borrow/accept more than you can afford. This will make repayment easy and will save you tons of stress. A good frame of mind is one of the essential building blocks of good credit.
- Age Before Beauty. Aged credit looks better and implies you’re committed for the long haul. Resist the urge to close accounts. Let them “mature”. They’ll ripen and appreciate like the best wine. Oldness, in this case, is one of the most prized building blocks of good credit.