business analyst consultant at Dell
The real key to building credit is making sure you don't have late payments and basically not living beyond your means. So how you manage the use of the credit is key. A great way to build up your score is to go ahead and get ONE credit card and make sure you pay it on time. I know sounds easy right? Getting a credit card does NOT mean "wow I've got credit so let's go out and paint the town red and buy extravagant gifts for everyone!!" Use your card, to make your regular purchases. At the beginning, go ahead a write a check or make an online payment right away. Make payments purchase by purchase just as if you were paying with cash at the time or at least every week. Some banks/companies have restrictions on how often you can pay online so the old fashioned check route may be the way to go. Continue this process until you have disciplined yourself to know how much you have spent and know that just because you have checks left doesn't mean you're not out of money, also if you are checking your balance at the bank, you have to remember to allow for checks you have written that may not have cleared the bank yet. Making continual payments like this ensures your payments are not late and you are using your credit responsibly. Do not get a "store card" every time they offer you so many dollars off for opening one. The additional cards create inquiries on your history, the more inquiries there are, the more your credit score goes down. After you have established yourself with one card, go ahead and get a second, and keep this one for more of an emergency basis. Everyone gets that emergencies happen and you may have to occasionally carry a balance, but ALWAYS be sure to make payments. If you can afford to pay 500 pay 500 even if the minimum is 50. Credit card companies love it when you only make minimum payments because they make a lot of money that way, but always at least make the minimum payment. Good Luck!