Building credit opens up a whole new world of options and savings that can be enjoyed throughout a lifetime. Whether your credit is low or you recently filed for bankruptcy, you can still quickly build your credit. Below are 5 quick ways to build the credit that you desperately need.
If you can settle debts that cause negative reporting, then you will be able to build your new credit on a solid foundation. It does not matter how much new credit you can build if there are still several “untidy” spots on your credit report. If you cannot settle the debt or if something is reported incorrectly, consider disputing the credit reporting. Sometimes this can remove negative reporting from your credit report altogether. If you face an impossible credit situation, consider filing for Chapter 7 bankruptcy. Chapter 7 will also give you a solid foundation because it removes all negative reporting of your debts.
Consider setting up a secured credit card with a bank or financial institution. This can be a very quick and easy way to build credit. Make sure that you are able to leave a $500 to $1000 deposit or greater for the security interest. You will need to find a bank or financial institution that offers secured credit card programs. Not all banks offer these programs. The credit that will be reported will be very beneficial. It will achieve similar credit results as a normal credit card account. The credit requirements, however, for starting such an account are not as strict or selective. This can help get your credit reestablish your credit when no one is willing to offer you a conventional credit card account.
A small bank loan is another quick way to build credit. Whether the loan is secured or unsecured does not matter. The bank will report your credit either way. You can many times just start a CD account (certificate of deposit) with the bank where you will leave $1000 within the account as a security. The bank may not require this and will simply offer you a $1000 loan with no security or restrictions. If you can progressively build credit with 2-3 banks in this fashion, then you will always have a source for future loan needs in the future. Over time, the bank will offer you much larger loans with no security required.
Affordable auto loans can also be a quick way to build credit. Be careful. Only purchase an automobile with a loan if you can afford to pay off the loan early in 1-2 years. Although an auto loan can be a great method for building credit, high-balance and high-interest-rate auto loans can also easily drag a person back into financial problems. Make sure that you can control and afford the automobile loan. Place up to 50% down or greater when you purchase the vehicle also if possible.
Eventually, purchasing a home through an affordable mortgage can also be a quick way to build your credit. Home mortgages are usually long-term debts. Consistently paying a large, long-term debt is one of the most powerful ways of building credit. It can quickly build your credit up to the higher end of the spectrum. Make sure to set up automatic payments with your banking institution. Nothing builds credit more quickly and easily than setting up a payment (such as a mortgage or other loan account) on an auto-pay system.