Having good credit in today's world can mean the difference between getting financing you need at an affordable interest rate and not getting financing or getting it at a higher interest rate. If you are starting out with no credit or need to improve your bad credit, there are methods to accomplish what you need. Here are some tips to help you survive financially while you build up your credit score.
Check Your Credit Report
When you are first starting out building up credit, it is a good idea to inspect your credit report. Even if you think you have nothing on your credit file, you may have incorrect derogatory or fraudulent info on your file. In a situation where someone has stolen your credit identity, you may find there is a credit card or loan that has been reported on your file that is showing late payments, so it is recommended to check your report to catch it.
Each of the three main credit reporting agencies, Equifax, TransUnion, and Experian, will provide you with a free copy of your credit report once a year for you to review and report any errors. Check each of the credit reporting agencies online, or order a copy of your credit file over the phone or through the mail.
Look at your report to check your name, address, social security number, date of birth, and any employment information are correct. Having items misreported can cause a delay or a denial in applying for a loan later on. Next, look at any public records and collections to make sure all reported on your file are, in fact, yours. Make sure any loan information is correct and reporting the right types of payment history. If you find any errors, immediately inform the credit reporting agency of the error so they can get it corrected.
Get Quick No-Credit Loans
While you are building your credit, you may need to borrow some funds to help you pay for any expenses that can pop up. Fortunately, you can get a short-term loan that does not require you to have any credit. This will help you out when you need some money, but your credit score is not yet built up to where you want it to be. It is also a good option when you don't have a credit card yet or any money saved in your savings account.
Payday loans are available in many states and are based on the idea you will borrow several hundred dollars, usually up to $500, then pay it back within the next couple of weeks. When you apply for a payday loan, the lender will not require you to have good credit or any credit at all because it is such a short-term loan. This option is helpful for obtaining a small loan quickly without having to worry about what is or is not on your credit.
Build Up Your Score
After you have the tools to monitor your own credit report and get quick financing when you need it, you can work on improving and building up your credit file. The largest factor to your credit file rating, or score, is your payment history. According to the FICO scoring system at the three credit bureaus, your payment history on your financial obligations makes up 35 percent of your score. Lenders will look at your history in paying back any previous loans to gauge how you will pay them back, so it is important to make all your payments on time.
If you don't have any credit yet, you can start building your credit by applying for a small loan through your bank or credit union, secured by a certificate of deposit or savings account. If you don't have any money to use for security, apply for a credit card with a higher interest rate. Once approved, use the card for small purchases that you can pay off in full each month to avoid having to pay any interest. Even though you aren't paying finance charges, you are still using the card responsibly and building your credit.
For more information, contact a professional in your area or visit a website like http://paydayexpresscashadvance.com/.