How to Build Your Credit

You need a good credit score to buy a new car or a house. In many places, you need one to rent an apartment or get a job. If you fear that your credit score could prevent you from living the life you desire, then you need to take steps to improve your credit score.

Check Your Credit Score

You need to know where you stand so you can know how far you have to go. With credit scores varying from 300 – 850 points, you need to shoot for the mid-700s or above to get the best interest rates.

You might do OK with a score in the low 700s or high 600s, but if your score is in the low 600s or below, you need to improve your score, especially when looking to make a huge purchase.

Know Your Credit Limits

To avoid hurting your credit score, avoid getting too close to your credit limit. A good rule of thumb is to keep your credit balance under 30% of your credit limit.

If you have made consistent payments on time without running too high a balance for several years, talk to your credit card company and ask them to raise your limit.

Get an Account that Helps You Build Your Credit

One of the easiest ways to rebuild your credit is with a secured credit card. This kind of credit requires you to deposit money to get credit. A secured credit card is great for a first timer card and those who have financial troubles.

Always make on-time payments and your card company will send positive credit information about you to the credit reporting agencies, causing your credit score to increase. Another option involves getting a credit builder loan from a credit union.

The loan amount is placed into a savings account that you cannot access. After you pay off the loan, you will not only be access to the money from the loan but also have a higher credit score.

Take It Slow

If you apply for too many new loans or credit cards in a short period, your chances of hurting your credit are high. It seems like it would be a good way to quickly build your score, but too much debt can too easily overwhelm you, negatively affecting your credit.

After opening an account, make timely payments for at least six months before applying for another one. Instead of applying for more accounts than you can handle, demonstrate that you can handle just a few account very responsibly. This will improve your credit faster in the long run.


Even if your credit score is terrible, there are numerous ways to start rebuilding it. If you are planning to buy a house, car, get a job, or rent an apartment then you should get to work on your credit score.