Tuesday’s Tip: Build Credit When You Have No Credit!
Today’s Tuesday tip is about how you can build your credit, especially when you have no credit. Don’t you hate that? You don’t have credit, but can’t get credit in order to build credit. It’s a vicious cycle! There is a way tho and I’ll tell ya how.
Go to your bank, as most have this program. You open up a secured credit card, using your own money. Usually the minimum is $500. The bank issues you a card to use just like any credit or debit card. Go use it! Just don’t go crazy, even though it is your money. You still have to pay it back. The bank reports it to your credit, just like a normal credit card. After 6 months of paying it on time, you will start to see your score rise. Now here are some tips to optimize the positive impact to your credit:
- Don’t max it out! Keep your balance below 30% of the credit limit.
- You could use it for gas, then when the bill comes in, pay it off each month.
- After a year of on time payments, the bank will issue you a traditional credit card. Well, at least that’s how Compass Bank does it. Check your bank for details.
- Pay on time every month! Even though it is YOUR money, it’s being used to show that you can utilize credit responsibly.
Did you know that car insurance companies check your credit, and your rate is based off of your driving record and your credit? I know crazy! So, even if you weren’t planning on buying a car or house right away, having good credit affects you in many ways.
I hope this helps and you found today’s tip useful. If you’re thinking about buying, here’s a blog post about the importance of getting pre-approved, before you start your home search.
Speaking of your home search! If you’re wanting to see what homes are available for sale in the Northeast Florida area, which includes Jacksonville, Orange Park, Fleming Island, Middleburg, Green Cove Springs, St Johns County, and the Beaches.