Simple and Effective Ways to Build Credit
Building credit is important. Building and maintaining credit is even more important as you look forward to buying a new house or car, and can even affect your chances for taking on new employment opportunities.
Pay on time
- No matter whether you’re paying rent or a mortgage, either way it’s important to pay your landlord or financial institution on time.
- Make sure at least one bill with your associated address is in your name. Internet, water, gas or electricity are common examples. Pay the bill each month in full.
- When signing up for a credit card, ask the credit grantor if your positive bill-paying history will be regularly reported to a credit reporting agency. Each month, pay off your new credit card. An easy and responsible way to use a credit card without going overboard is to pay your bills on the credit card, and then immediately pay off the charge on the card.
Get a loan
When obtaining a loan with the goal of improving your credit, here are a few tips to keep in mind:
- Make payments regularly
- Pay more than just the minimum amount due each month
- Reach a ‘low balance’ (typically recognized as below 30%) as soon as possible.
If your Military Family is looking to take this approach to boost your credit, AAFMAA has a great resource to consider. Their one-time $4,000 loan only has a 1.5% annual percentage rate! And, you’ll have 48 months to pay off the loan, without any penalties for early re-payment. Learn more.