Are you tired of getting denied because your credit isn’t good enough?
You aren’t alone with your struggle. Nearly one-third of Americans have a credit score below 601.
Credit can seem complicated if you’re just starting to learn. The good news is, it isn’t that hard to learn how to get excellent credit.
Follow the tips below to get your credit where you want it to be.
1. Keep Your Credit Utilization Low
While you should always aim to pay off your credit cards every month, sometimes things don’t work. When this happens, you should try to keep your utilization as low as possible.
Your utilization is the amount of money you owe compared to your total credit on all your accounts. The lower you keep this, the better your credit score will get.
2. Don’t Close Old Accounts
Your credit score tells lenders how trustworthy you are. Part of that is the age of your accounts.
Instead of closing credit cards that you don’t use anymore, keep the card around. It won’t hurt, and it will increase the average age of your accounts.
This also applies to old loans like auto loans. Don’t try to remove them from your credit report. They can help your credit score too.
3. Don’t Apply for Credit Often
Every time a company does a hard pull on your credit score, it drops it by a few points. If you do too many, then you could end up really hurting your score.
Make sure you spread out your credit requests, so your credit score has time to recover from hard pulls on your credit history.
4. Monitor Your Credit
In the perfect world, fraud wouldn’t happen. But that isn’t the case.
Make sure you sign up with a free credit monitoring service like CreditKarma to keep tabs on your credit. They will report any new accounts that are opened.
When this happens, get things resolved as soon as you can. You don’t want your credit ruined because someone steals your identity.
5. Get a Secured Credit Card
Unfortunately, it’s hard to get loans and credit cards if you don’t have a credit score. But that doesn’t mean you’re out of luck.
A secured credit card is an answer. These credit cards require a deposit to get and give you a small credit limit. They are a great way to get started with credit building.
Make sure to pay off your account every month, and over time you will start building credit. Once your credit is good enough, switch over to an unsecured credit card.
Head to Bonsai Finance to learn about your options for secured credit cards.
How to Get Excellent Credit: Final Thoughts
It doesn’t matter if you have no credit or poor credit. You can still start building your credit today.
With the tips above, you should know now how to get excellent credit. Make sure you start today because you won’t build your credit just by waiting around and doing nothing.
Of course, it does help when you have your finances in order. Head over to our finance section to learn a few tips for managing your money.