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How to build credit


How to Build Credit: 4 Actionable Strategies


We live within a credit-based economy.

Whether you want to get a mortgage, get a student loan, or buy a new car, you need to be creditworthy in the eyes of lenders to qualify for loans. Even something as simple as taking out a new credit card requires, you guessed it, established credit.

And, given that a higher score likely means better rates, it’s well worth the effort to do all you can to move your score up. Your credit score determines overall credit worthiness to a lender, and a good score is the gateway to financial freedom and prosperity.

If your credit score is less than ideal, not to fear! In today’s article, we are going to cover four strategies that can help you improve your credit.

Before we dive in, here’s a quick look at a typical credit score range using the FICO® Score range (note, score ranges vary based on the credit scoring model used). A good goal is to challenge yourself to move up one level each year:

  • Poor: 300-579
  • Fair: 580-669
  • Good: 670-739
  • Very Good: 740-799
  • Exceptional: 800-850

1. Make Your Payments on Time

Experts recommend making at least the minimum payment on or before the due date, and preferably to pay the statement balance in full if possible. On time payment demonstrates to the lender you can handle the line of credit you’ve been given and goes a long way in building trust. Consistently paying accounts on time should help to improve your credit score as your financial security grows.

2. Keep the Balance Low

Any outstanding debt that accrues on your credit card could impact your credit score. Experts generally recommend keeping credit card debts below 30% of the established credit limit. One easy way to do this is by limiting credit card purchases. Need a new phone? Consider a cheaper deal on a used one to help preserve your credit cushion.

It’s understandable that making timely credit card payments can easily slip your mind as you navigate the demands of daily life. To prevent credit balance accumulation and the negative effect it can have on your credit score, there are a few best practices you can implement.

  • First, try setting reminders on your cell phone.
  • Next, look to sign up for automated payments.
  • Finally, if you carry a balance on your card and find yourself with some extra funds, consider a spontaneous lump-sum payment to bring the overall debt down.

3. Correct Credit Report Errors

All three of the major credit reporting agencies (TransUnion, Equifax, and Experian) will provide you with a free copy of your credit report if you ask for it. Scrutinize the findings, highlight any inaccuracies, and dispute any items that should be removed. Prior unpaid bills or debt collections that have been satisfied are good places to start. Be ready to supply proof that the items in question are verifiably incorrect and should be removed.

4. Request a Higher Credit Limit

It’s important to remember that maxing out your credit cards could work against you in the lending world. In fact, lenders prefer borrowers to utilize no more than 30% of their available credit. If you find yourself frequently maxing out your limit, consider asking your lender for a higher limit.

Obtaining a higher credit limit while your outstanding balance remains constant will immediately improve your credit-to-debt ratio and could yield a positive impact on your credit score. A bump in your income could improve your chance of getting a higher credit limit. If you have recently received a raise, consider giving your issuing bank a visit to request a credit-line increase in light of your higher income.

Building Your Credit Score as Fast as Possible for the Future

A good credit card score is increasingly becoming the litmus test for overall financial reliability. Landlords, employers, and insurers might even use your credit score reports to gauge how responsible a renter, employee, or driver you will be.

A good credit score could influence the kind of apartment you live in, the type of job offer you get, and the insurance rates you’re subjected to. You might also enjoy lower interest rates on different of loans with a good credit score.

Welcome to First Phase: where less-than-perfect is more than enough.


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First Phase Visa® is issued by The Bank of Missouri pursuant to a license from Visa U.S.A. Inc.

First Phase reports payment history to the three major credit bureaus so it can help build your credit if used responsibly. Building credit is accomplished by keeping your balance low and paying all your bills on time every month. Late payments, missed payments, or other defaults on your account may be reflected in your credit report and may impact your ability to build credit. First Phase begins credit reporting following your first purchase or cash advance using your card.

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This information is presented for educational purposes only. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.