A great credit reputation doesn’t happen overnight

A great credit reputation doesn’t happen overnight

– Increase your income. The issuer may have rejected your application because your income is too low. You have to be able to handle at least the minimum payments associated with the account, so earning more income can help issuers see you as a stronger applicant.

– Pay off your debt. If you are already carrying a balance on different credit products, issuers may think you can’t afford to take on another debt. Reducing your financial obligations could make you a better candidate for the card you want.

When you’re ready to try again, apply for one card at a time. An overabundance of applications all at once will lower your scores, especially if you don’t have much on your credit reports.

– Make paying in full a habit. Track your charges as you go along and stop before the balance becomes stressful.

– Automate payments. “Enroll in the bill pay system right away,” Goldman says. “You won’t have to worry about making your payments on time.” The money will be deducted from your checking account when the bill is due, and you may be able to arrange for a complete or partial payment.

– If you must revolve a balance, commit to paying it off as soon as possible. When your card is at a zero balance, you can start charging again.

As a parent to a young adult, Robinson-Jones recommends parents play a part in their child’s credit card research processpare cards the child is qualified for.

“Guide them to the card that will really help them,” Robinson-Jones says. “It should have good mobile tools so they can track charges and pay with their devices. Talk about interest, and find the card that has the lowest APR. They may want to buy something expensive, and that rate will matter.”

When you have a year or more of excellent credit card activity listed on your credit reports, lenders and businesses will see that you can consistently manage your money and credit

Credit card management isn’t intuitive, so parents should explain what to know about credit cards, such as how to make payments and steer clear of debt, and how rewards work. Review the rewards programs associated with different cards.

“Good credit is important for many reasons,” Goldman says. “You’ll pay less for goods and services because you’ll qualify for loans with better rates, and you may even pay less for insurance.”

Keep that first card open and active, even after you apply for and start to use Indiana online payday lenders other cards and credit products. It lengthens your credit history and shows consistency. That’s important not just to credit issuers, but to landlords and even to employers. “As soon as you’re ready for a credit card, apply,” Robinson-Jones says. “It sets up a foundation for financial success.”

For example, a flat-rate cash back card may be easier to understand, but your child that offers a higher rate on certain purchases, like at restaurants and gas stations

Develop a budget that ensures you always spend less than you earn. After that, you can decide on the expenses you want to charge without getting into financial trouble. For example, if gas costs you $100 a month, you may consider putting that on your credit card and then paying it off before interest charges start to accrue, especially if you get rewards for spending at the pump. Charging existing expenses like this and then paying off the balance can help you get in the habit of responsible credit card use, staying within your budget each month while you build credit.

– Become an authorized user. If someone with good credit lets you join their credit card account as an authorized user, that account will show up on your credit report. As long as the bill is paid on time and the balance remains low, it will give your scores a lift.

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