Building Credit

Are you trying to start out building good credit or are you trying to start over with your credit?

There is tons of information out there on building credit, some good, some not so good and some just plain bad advice. This has been my personal experience in re-building my own credit after bankruptcy in 2005 and following the advice of my suggested lending partner.

You’ll most likely want to start with getting a secured credit card. Secured cards are great in helping to build good credit. You can get secured credit cards from your bank, credit union, Capital One, Discover, just to name a few sources. You’ll need to put up your own cash, a good starting point is $500. Basically, what this does is provide you with a credit card with a $500 credit limit. You’ll utilize it just like a non-secured credit card, charge purchases and pay off the balance.

You’ll want to keep your total credit utilization at 30% or less of the credit limit.

So, using $500 as an example, you’ll want to keep your monthly usage at $150. I recommend charging a tank of gas each month and paying the minimum balance the first month, the second month, charge a tank of gas and pay the card off, rinse and repeat. This allows the credit bureaus to report revolving credit showing you have a small balance carried from month to month and showing responsible usage
in paying it off.

If you have a family member who is willing to add you as an authorized user to one of their credit card accounts, this will also assist you in building credit.

Avoid applying for multiple credit card accounts close together; it is recommended spacing out applications by 6 months if possible.

Don’t close open accounts either, you want to keep them open and showing as open on your credit report. Closing accounts can hurt your credit score as it reduces the amount of available credit you have.

If you need credit repair, please don’t hesitate to reach out. I work with some amazing credit repair partners who will evaluate your credit report to determine if they can assist you before signing you up for any services.