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Starting Your Credit History the Right Way

Jun 29, 2008
When it comes to the wonderful world of credit, it can get quite confusing and the main question that many new comers love to ask is, "How the heck do I start building credit?" This answer is actually easier to answer than you thought. While most people think that they need to start building credit with a regular credit card, there are so many other ways, it's silly and today, I'm going to show you exactly how you can start building your credit and getting a great FICO score.

Credit cards is the name of the game

I know I mentioned credit cards in the introduction and while I believe this is the best way to get credit, you may want to look into other alternatives if you don't think a card will be best for your habits. Many people find that they spend too much when they have a piece of plastic. If you think that this is you, you may want to go to the next option.

Many kids graduate from high school and are eager to start building credit. What most kids don't realize is that there are cards out there that are designed just for them. These types of cards are called student cards or student credit cards. These cards are geared toward any student currently enrolled in any college. All the credit companies ask for is proof that you're attending the school and little bit of personal information.

Now you're probably thinking that these cards probably stink and the rewards are probably awful. Well, you couldn't be further from the truth. Most student cards are actually quite reasonable when it comes to rates and rewards. You can choose any type of card from cash back cards to getting gas rewards. The key to finding the right card is by research and asking around.

The other option - loans

If you skipped the credit card portion or you just want to see what option two is, it's a bank loan. I'm going to share a little secret and tell you exactly how you can start building credit for the first time and it involves little to no risk.

When you go into a bank, ask for a small personal loan around one hundred to two hundred dollars. Most banks will bite on this regardless of your credit score. From here, just hold onto the money and don't spend it. Now, you can either pay the loan off in full when your first payment is due or you can pay it off in increments, it's up to you. Remember, that you'll have interest charged to you if you pay increments. If you do this enough times, you can build up a nice credit score.

These are two major options if you're looking to build your credit. If you don't like either option or you want a credit card and you're not a student, you can always try a department store card. These cards are generally easy to get but you'll probably get a low credit limit. Regardless, these are all ways you can build your credit. Remember to use your head when you use your credit!
About the Author
Find student credit cards and more of Tom's work at FINDcollegecards.
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