Good credit is an essential financial tool that allows a person to move forward successfully with their goals. From major purchases such as buying a home or automobile to the convenience of having a major credit card, good credit plays a key role in the overall picture.
This means establishing a credit history that shows potential lenders that a person is responsible with money. A high credit score provides a quick view that an applicant meets his or her debts on time and in a forthright manner. For people with little to no credit, it is very difficult to make major purchases on credit even when their income justifies the purchase. The credit score is determined through an unbiased system that only shows the timeliness of payments, debt-income ratio, and other numerical factors.
Lenders and Statistics
Since lenders will base their credit decisions on this statistical data, it is essential for building credit to raise the score to a good or excellent credit rating. People with excellent credit save a lot of money because interest rates are lower. Keeping these factors in mind, there are a few ways to build credit successfully for people who have little credit history, a poor past credit history, or no credit at all due to various reasons.
How to Establish Credit When You are Just Getting Started
Easy approval cards are available for just about anyone who wants to improve their credit history. There are a few different ways to go about this process. Signing up for a secured card that will require an initial deposit is a fast and easy way to build credit, which will be reported to the three credit bureaus every month. This means that you can get started right away on building a strong credit rating. The best secured credit cards available in 2017 are:
Capital One Secured Mastercard: Capital One is a reputable banking service that has many helpful options for a person who is new to the credit card process, making this choice an excellent one for future loan plans. There is no annual fee, and after a few months of timely payments Capital One will raise your credit limit. After building a mutual trust with Capital One, you may also qualify for a car loan with interest rates that are comparable to other banks. Building up a good credit history with Capital One, a company that has been providing opportunities for people with little or no credit history since 1988, is an excellent way to go.
Discover It Secured Card:Discover is another well-established company that offers secured credit card options for new borrowers or people with fair credit. You can open a Discover It credit account with $200 or more, which will be available to you at any time by using your new credit card. Paying on time builds credit history quickly, and this card is a good choice.
OpenSky Secured Visa Credit Card: Opensky secured credit cards are a good option for people who have a damaged credit history that is limiting their possibilities. It takes between 3-6 months for your credit score to show improvement that tells new lenders you are serious about repairing credit and have the means available to do so. Open Sky is unique in that they do not run a credit check. As with all credit, pay your payments on time every month, keep balances low, about 30% of available credit.
There are also a few other credit cards for people who are completely new to credit or with a damaged history. Some of the best are those already discussed as well as the following:
Credit One Bank Unsecured Platinum Visa
First Premier Bank Mastercard Credit Card
Start Building Your Credit Future Today
Instant credit card options are another way to build credit history within a short time period. These types of cards are easy to apply for online, and a quick decision is made within minutes.
The Credit Card Accountability, Responsibility and Disclosure (CARD) Act went into effect in 2010. This law protects cardholders in many ways. CARD keeps banks from raising rates or adding fees, as well as limiting their ability to cancel cards for no reason. This also means that cards can be a little more difficult to obtain, so once you have received an opportunity to build credit, use it wisely and watch your credit score rise. All it takes is for you to have one or two major credit cards, keep the balances low, and pay every month on time.