Buying a car, getting a loan, or even finding an apartment depends on a strong credit history. Unfortunately, lenders and financial services providers are often hesitant to extend credit to someone who doesn’t have much on their credit report. This can make establishing your credit reputation seem hopeless, but there are some steps you can take to start building up your credit.

Do:

Check your credit report.

You may not have been opening charge accounts and taking out loans, but someone else might have. Order a free copy of your credit report from each of the three major bureaus and check them for errors. If you find accounts that aren’t yours or other mistakes, file a report immediately.

Get a credit card.

Many lenders offer options designed for borrowers with a limited credit history, but pay close attention to the interest rate and other fees. They may be more significant than it would be for those with higher scores; however, with some planning, you can manage these costs and limit the interest earned. Keep your credit usage to about 30% of your limit, and pay off the balance in full with every cycle to minimize interest and late payment fees.

Don’t:

Make late payments.

Your payment history is one of the most important aspects of your credit score, so pay all of your bills on time every month. If you tend to lose track of due dates, setting up automatic payments can help avoid late fees and negative marks on your credit report.

Apply for too many cards at once.

Every time a financial services institution checks your credit history, your score will likely drop by a few points. While you might be able to recover quickly from a single inquiry, having multiple checks on your history will weigh down your score, especially if you’re just getting started. Additionally, your average length of credit will dip if you apply for multiple cards within a short time frame.

Whether you’ve just started building your credit or want to improve your score, the financial services professionals at Cloyd & Associates PSC will provide the detailed insight you need. With offices in London and Corbin, KY, they offer personalized service and accurate results to individuals and businesses throughout Laurel County. Visit their website for more information about their broad range of financial services, call (606) 864-8110 to speak to someone in London, or call (606) 528-8776 to make an appointment at their Corbin office.