What Is The Best Way To Establish Credit – There are some simple ways to establish new credit, even if you don’t have the best rating. The easiest path is to pay off any collections that are reported and to make payments on a new account. Start by choosing one or two department store applications.
Department stores are also good. Sears or Macy’s will set you up on net 30 terms relatively easily, for at least a few hundred dollars, and they usually give you a discount towards your first purchase from 5, 10, or even 20 percent. Knowing what to do next will determine your payment history — never pay it off in full — make regular payments so that you can build good reputation.
When you don’t qualify, then there are other options to help build your score. The best way is through a gas card with companies like Amoco, Mobil, Shell, Gulf, and Texaco. These type of accounts shouldn’t be confused with store or gas rewards branded with a Visa, MasterCard, American Express or Discover logo.
Another credit option is to open a checking and savings account. Having bank accounts will prove that you are responsible and stable. This is something that is often overlooked.
A small car loan for a used car can work well, or one as a personal general purpose. If you cannot qualify, see if a parent or other family member will co-sign for you. Having a co-signer will allow you to establish credit on what you need with a larger loan with a better interest rate.
Starting out might be a hassle at first, but proving to lenders that you are fully capable of paying bills on time is the best way that prove that you’re responsible, so don’t miss a payment.
One of the best ways to establish a good payment history is through a “Secured” Visa card that you can get from a bank. You can only charge on what you deposit. This is a great option to show how you make your monthly payments on time.