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How To Get Good Credit
By BadCreditMakeover.com
How to get good credit? That is the
question we all want the answer to.
It is so important to have good
credit. Everything in your life
depends on it. From insurance to
employment to housing to borrowing
money, without good credit you pay
more or in some cases cannot get what
you are looking for. We all know the
pitfalls of bad credit, so how do we
avoid that. How to get good credit is
what we will discuss here.
What is good credit? It is when your
debt ratios, payment history, and
loan balances meet a lender's
qualifications. How to get good
credit can be answered by making your
payments on time, all of the time.
That is first and foremost. Every
time you make an on time payment, it
improves your credit score. The
longer the history of on time
payments, the better your score and
the easier it will be to get other
loans. You get good credit by being
responsible. The number one rule of
good credit is on time payments.
How to get good credit can be
answered in another way. Lower
balances. If you keep your credit
cards at their maximum, even if you
make the minimum payment on time
every month, you are hurting your
credit score. You need to have as low
a balance on those cards as possible.
Pay them off as quickly as you can,
and only charge what you can pay off
in full every month. If you have a
$1,000.00 limit on your credit card,
and you pay off that $1,000.00 every
month on time, your credit will be
better than if you charge the same
$1, 000.00 and only make the minimum
payment, and keep the balance at its
maximum. So another way to get good
credit is to keep your credit card
balances paid off every month, or
keep them as low as possible. Never
max out the credit cards.
Another way to get good credit is to
keep your debt ratios in check. You
debt ratio is the amount of debt
compared to your income. The
percentage of your debt to your
income should be kept as low as
possible. Your income is a finite
amount. You can only have so many
payments and then you have spent it
all. You need to keep your monthly
payments low. The idea is to hold on
to what you earn, not spend it all
every month on housing, credit cards,
and cars. This is how you get good
credit.
Watch what you spend, and be sure to
save something every month. Another
way to get good credit is to have
bank accounts. You should at the very
least have a checking and savings
account. As your income increases,
try to change that basic checking
account into one that will pay you
interest. A money market account is
great if you can meet the balance
minimums. You may also want to open a
CD in addition to a savings account.
The interest rates are higher and it
prevents you from tapping into those
funds. Keep in mind; it is always
easier to get a loan when you can
show you really don't need the money.
In your quest for good credit, having
accounts that pay interest helps. If
your loan application asks if you
have a checking or savings account,
you can be sure they will look into
your answers.
So, we have discussed ways to get
good credit. It is now up to you to
put a plan into action to improve the
credit you have. Do everything you
can to pay off those credit cards;
this will help you more than anything
else. Make all of your payments on
time, all of the time. Finally, when
looking into how to get good credit,
remember setting a budget and
sticking to it will help
tremendously.
About the Author
This article is courtesy of http://www.badcreditmakeover.com Look no further for the best online credit deals.
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