How to Build Your Credit History

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Have you ever applied for a credit card only to be declined for the following reason:

            “Application for credit denied because of a lack of revolving credit.”

It’s frustrating to say the least. Basically what this means is that you are being denied a credit card because you’ve never had a credit card before. You haven’t had the chance to prove yourself ready to handle credit and so the creditors aren’t willing to take a risk on you. The circular logic is enough to make anyone annoyed, especially given how necessary credit cards are to living life today.

Building a great credit score so that you can get that card is all about careful planning and managing your budget. We’ve compiled five steps you should take to build up your credit score safely and in a foolproof manner. You’ll have to be patient, but "the system works."

1. Get Some Bills in Your Name and Pay Them On Time!

Paying your utility bills isn’t just a way to make sure that your lights, heat and phone stay on, but they’re also great ways to build up your credit history. A large part of your credit score is actually dependent on how well you’ve been doing in paying your regular bills. If you’re living with someone, see about moving one or two of the bills into your name and then manage them yourself. Not only will this teach fiscal responsibility, but it will show the creditors that you can handle your bills.

2. Start Making Money

Well, obviously, you may say, but it’s true: your income does have an impact on your credit score. The better it is, the better your score will be and the more likely it is that you’ll get a good credit card. Even those with a variable income, such as freelancers and the self-employed, can still improve their monthly totals and look more appealing on the credit card application. And of course, more money equals the ability to pay your debts off on time.

3. Start With a Secured Credit Card

If you never had a student credit card, then you’ll have to start small. Getting a secured credit card is a great way to begin. These are almost always given with approval to even those with no credit history and are a great way to build your credit score safely. Secured credit cards are ones where you put down a security deposit which then becomes the credit limit of the card. If you show yourself to be responsible with it, you’ll be automatically upgraded to a semi-secured and then normal credit card--usually within a year. It may be a lower grade card at first, but it’s better than nothing. more »

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