Credit cards are a valuable financial tool, but it’s easy to get into trouble if you don’t manage your credit. So, it’s always a good idea to compare credit building cards. Here are five things to know about building credit:
Opening Lines of Credit
You can open lines of credit by using a credit card to make small and large purchases, recurring monthly payments for utilities or other services, or even pay for your groceries. Make sure you have the funds to cover all charges on your card at the end of each billing cycle, or else you could incur late payment fees or other penalties.
Apply for a Secured Credit Card
Secured credit cards are a great way to build your credit history. If you have no credit or bad credit, a secured card can help you establish a good payment history and increase the likelihood of being approved for an unsecured loan in the future. To open an account, you must deposit money into an account at Chase.
According to experts like Lantern by SoFi, “Cards like these may be options for people who don’t have much credit history or have poor credit scores, since they reduce the risk to the credit card issuer that you could default on the money you owe.”
Get a Retail Store Credit Card
If you’re the type who enjoys shopping at specific stores and wants to take advantage of their discounts, it may be worth getting a retail store credit card. But, of course, it doesn’t matter if you actually use these cards or not—the point is to build credit by using them responsibly. So if you pay off your balance every month and ensure you don’t exceed your limit, it should not impact your score.
There are other options, too: many companies offer gift cards that can be used anywhere but still help build a credit history because they require identification when making purchases.
Ask Someone To Make You an Authorized User
Asking someone to make you an authorized user on their account is one of the easiest ways to build credit. You are essentially using another person’s credit card or loan information, so you don’t have to worry about any of the financial responsibilities that come with having your own card. This can be particularly useful for students and young people who haven’t established their credit history yet.
Not only does this allow you to build up a solid history of responsibly paying bills, but it can also help get you approved for loans or new credit cards when it’s time for you to apply for them.
Get a Co-signer for a Credit Card or Loan
A co-signer is someone who has good credit and agrees to stand with you on a loan or credit card account. If you don’t qualify for the product or have bad credit, getting a co-signer could boost your score.
A co-signer is someone who becomes responsible for another person’s debt if they do not pay it back. It applies primarily to student loans and mortgages when parents help their children get approved by becoming co-signers on their behalf.
So there, you have five easy ways to build up your credit score. These tips will help you build a solid financial foundation from which you can grow as an individual and achieve your goals.