
It can seem daunting to ask how to build credit for someone new to finance. A credit account can make it seem like you're in a tight spot. Lenders are likely to turn you down because of your lack of credit. Good news is that you can begin building credit as early as 18 years old! By following these tips, you can be well on your way to qualifying for the best interest rates.
It is important to pay bills on time
To build credit, you can keep up your payments. Keep a record of all your accounts and the due dates. Be sure to list the lender, minimum monthly payments, and the balance owing. This list can be divided into categories according the method you use to pay. If possible, you should change the due dates or use an automatic payment method. You can even choose an amount you wish to have debited automatically.
Your credit score will be affected by your payment history. More than thirty percent of your credit score depends on it. So make sure to pay your bills on-time. A late payment can result in a late fee or even a negative mark on your report. You will find your credit card and loan information on your credit report. However, utilities and phone numbers may also be listed. Paying all of your bills on time can go a long way toward building your credit score.

Having multiple credit cards
It may seem like a good idea to have several credit cards. However, this can lead to financial trouble. Although multiple credit cards may seem like a great way to save money, they can lead you into significant debt and financial trouble. Avoid multiple cards that offer rewards. Only one card is better than the others. You will get the best results if you only have one card. Then, pay it off as soon as possible. This will help you keep track, and save money.
While having a number of credit cards can help your credit score, it's important to remember that having too many cards can hurt it. It is best to only select the cards that you are able to responsibly use, and make minimum monthly payments. Multiple credit cards can also increase credit utilization. So make sure to use them sparingly. Generally speaking, it's best to maintain two or three credit cards with an appropriate credit mix. It will improve your credit score if you keep track on your payments.
Increase your credit limit
A good time to request an increase of your credit limit is after you have graduated from college, or if you have a steady income. A credit limit increase will allow you to make small purchases. It is the best way to increase your purchasing power. The process of asking for a raise is simpler than getting a new debit card. An increase can also be requested if you recently transferred to a higher-paying position or have received a raise.
After your payment history has been good, contact your credit card provider to ask for an increase. While you're waiting, you can mention why you want a higher credit limit. You should inform your credit card issuer if you've received a raise recently or about your outstanding payment history. Creditors will be more interested in you if your credit limit is high. However, remember that increasing your credit limit to build credit doesn't necessarily mean that you can use a credit card without paying any interest or fees.

Get a credit-builder loan
Credit builder loans are a great way to improve your credit score and establish good credit. These loans deposit funds into your bank account and require monthly payments to pay off the loan. You will be reported to the major credit bureaus. On-time payments will improve your score. You will lose your credit score if you miss payments. Credit builder loan are usually available from your bank.
Although a credit builder loan doesn't require a formal credit check (although some lenders may use your ChexSystems banking history to determine your eligibility), it is not necessary for you to have a credit check. Having bounced a check can also impact your loan approval. These loans can be obtained through many credit unions. However, you will need to sign up in order for your loan application to be approved. A small membership fee is required and sometimes a donation to a partner charity.