Build Credit: It’s Easier Than You Think

Building good credit, specifically a good credit score, improves your chances of getting approved for more loans at lower interest rates. Even if you don’t need credit at this moment, you never know when you might need a loan, and a low APR credit card is very convenient. “How do I build credit?” you ask. Ironically it can be tricky to build credit if you don’t have any credit history, but hey, everyone has to start somewhere.

• Plan Your Finances
• Automatic Credit Alerts
• Get Expert Advice
• Track Your Cash
• Relax

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First, what exactly is a credit score? A credit score is a three digit number that describes the risk that a lender takes when lending you money. The higher your credit score the better, perfect credit is generally above 740 and means that you always pay back what you owe and do it on time.

Your credit score will determine both whether or not you get a loan but also what interest rate you pay, since a higher interest rate is an expression of your risk of not paying back your loan, or defaulting.

Check your credit. You’ve never had a credit card, so why check your credit? Just do it. Identity theft is rampant and credit agencies have been known to confuse their records. US citizens are entitled to a free annual credit score, go to www.annualcreditreport.com to check yours. Chances are everything will look fine, but if you see activity under your name (and SS#) that you don’t recognize you need to take action.

Get a secured credit card. If you can’t get a credit card, a good way to build credit is with a secured credit card. You can open an account at a bank and deposit some money in it. Your credit limit for that card becomes the amount in that account. In the event that you don’t pay your bill on time the money gets automatically deducted from that account. This is a secure way for banks to lend to someone with little or no credit history.

Plan your finances. It’s never too early to be a responsible saver, spender, and earner. If you manage your finances responsibly from the get-go you will have a life filled with good credit and wealth. Register with a financial guidance provider like HelloWallet to put your finances in order before they can get out of order. HelloWallet offers a risk free trial for 60 days.

HelloWallet organizes your financial information by securely downloading your account data. You get a complete picture of your finances and can set unique goals like saving for college, putting aside money for a secured credit card, and much more. HelloWallet will even let you know if it detects unusual or fradulent spending on your credit cards. Start your credit history off on the right foot, join HelloWallet and let us help you to build high credit scores and financial success!