How To Build Credit

 Building credit is easy once you know where to begin and what you should be doing. It’s definitely not rocket science but if you don’t know how it can be a little intimidating.

Here’s my favorite method on how to build credit instantly. This method requires trust from both you and the person that agrees to help you with this method. This method is what is often referred to as piggy backing.

What you need to do is have family member or friend that has good credit add you to one of their credit accounts. These accounts could be credit cards, personal loans or even a car loan. All they need to do is call one of their creditors with your information (social security number, name and address) and add you to the account. You will instantly have credit history for as long as they have had the account.

If they are going to add you to a credit card, store card or gas card. It is absolutely critical that they add you as a joint account holder. If they only add you as an authorized user it will do nothing for helping you build credit.

Here is a word of warning for this method. If they currently have late payments or make late payments in the future this information will be reported on your credit report. If they default on the loan the creditor can go after you. This is why trust is such a big factor with this method.

The second easiest way to on how to build credit is with secured loans. This can take the shape of you putting anything of value up for collateral in order to get a loan to establish some credit.

The most common way is with a secured credit card. There are tons of them out there on the internet so do your due diligence and research them thoroughly. I say this because many of them will charge monthly fees or inactivity fees. Basically the way that they work is that you put up a certain amount of money and they in turn will give you a credit card for the amount at or above which you have given them. Make sure they will be reporting to all three credit bureaus, if they will not find one that will.

Another common way on how to build credit is with a title loan. If you own a vehicle free and clear you can get a small title loan from practically any bank. There are even many title loan companies out there as well. Once again it is crucial that they will be reporting this information to the credit bureaus. If they will not, find someone who will.

The third and most overlooked way to get a secured loan easily, is through your bank. All you need to do is make an appointment with your banker and explain that you want to build some credit. Tell them that you will put up the exact same amount of cash as you want for the personal loan. They will be falling all over themselves to give you the loan because there is no risk involved. Make sure they will be reporting to the credit bureaus otherwise you will need to go somewhere else.

Following these methods of how to build credit are simple and fool proof. Once you have about a 6 month credit history your mail box will be flooded with more credit offers because you have done such a good job building credit. Now all that is left is for you to take action.