By Manuel Tovar, June 11 – Hispanic Solutions Group
To build credit, you can start by looking for lenders who offer financing to consumers in your position. You can also reach out to a loved one to see if they are willing to help you.
Here are three strategies to consider when you are ready to build credit for the first time and they are:
- Open a credit card for consumers without credit
A credit card it can be a great tool to help you build credit for the first time. Credit cards can influence all five score factors FICO Score and on the five VantageScore scoring factors. So, if you manage your new account or accounts wisely, it can help you on your score-building journey in many ways. But remember, it’s important to look for no-credit credit cards when you’re just starting out. These may include:
THE DATA. – These credit cards are specifically designed to help borrowers who are new to credit.
- Loans for credit builders
If you want to add an installment account to your credit report (credit cards are revolving accounts), consider a credit building loan.
With credit-building loans, the lender keeps the money you borrow in a separate interest accrual account. You make a monthly payment to the lender and when you finish, the lender gives you the loan proceeds, plus any interest you have earned.
Because there is less risk to the lender, credit building loans are generally easier to obtain than traditional loans. This makes them a good option when you are trying to build credit for the first time.
- Authorized user status
A third approach that you can use to try to establish credit is the authorized user strategy. And it works like this: You ask a family member or friend to add you to an existing credit card account as an authorized user. If the account is in good standing (meaning no late payments and a low credit utilization rate), there is a chance it can help you build credit if it shows up on all three of your credit reports.
You need to ensure that your name is added to an account that was not recently opened, has no late payments, and has a low balance relative to the credit limit.
They are advised: whether you plan to apply for a credit card, a credit building loan or becoming an authorized user, make sure the lender reports the account to all three credit reporting agencies first. If your lender does not report these types of accounts to all three credit bureaus, then your credit reports and scores will not fully benefit, and your journey will take longer because you will have to open more accounts that will report to all three credit bureaus.
You can qualify for a credit score within 6 months
Generally, a credit score cannot be generated overnight. But when you establish the right types of accounts and manage them responsibly, you may be eligible for a credit score. FICO o VantageScore within six months or less.
Should, focus on loans and Credit cards that are easier to obtain for those who are new to credit. Make sure you open accounts that are reported to all credit reporting agencies. And the most important thing is that you make all your payments on time and thus avoid delays.
We invite you to follow our social networks: LinkendIn, Facebook, Twitter and Instagramto find more information related to finances. Also on our YouTube channel The Credit Channel to learn how to improve your credit. If you need help in disputing debts that do not belong to you, call us at (612) 216-1599.