Choosing the Right Accounts to Boost Your Credit

When handled appropriately and with smart decision making, credit can be a great thing that offers opportunities and advancement to you. Most people think of credit as being able to afford a home, a vehicle or other loans for items of value. However, credit is also used to judge a person’s character when applying for a rental, a job or other life advancement. Keep reading to learn more on choosing the right accounts to boost your credit score.

Do Your Research

Take the time to choose and create the right accounts to reflect good credit. Focus also on maintaining those accounts to boost your credit rating and score for the ultimate level of possibility in the future. So, how do you know which are good accounts to have and which are ones to avoid? There are many different types of accounts that can be obtained and many of them are offered with enticingly low interest rates or high limits. The first step in determining accounts that are worth your time is to read the fine print.

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Take note on whether the low interest rate will balloon after a couple of months or whether the high limit will create a level of temptation you may not be able to avoid. Also, only work with banks or other companies you know and trust. Try to avoid ones that are new, unstable or unknown. Besides being a smart choice for investing your time and money in, larger, more well-known lending companies are better to have on your credit report. This is because they lend more weight when others are considering lending to you.

Starter Accounts (Choosing the Right Accounts to Boost Your Credit)

Good accounts should be smaller ones you can pay off in full before the due date and should be for things you need or reflect a starter account status. Starter accounts are those that are small or through trustworthy companies with slightly lower standards than other companies. They are often jewelry store accounts, store credit accounts, cell phone company agreements and other small accounts.

These accounts are perfect for first time borrowers or for those recovering from bankruptcy that essentially have to start over with their credit building. Once you have been given the chance with a small account, it’s up to you to be responsible with it and pay your payments on time and in full each month in order to keep them in good standing and avoid going into debt or financial hardship.

Account History

The longer a good account is in good standing on your credit, the higher it can push your credit rating and score. Large lenders, like real estate and car loans, like to see that you have a few good, solid accounts that you have had for years and never been late or defaulted on. This shows not only can you make smart financial decisions, but you can also maintain loans and budgeting over an extended period of time, which will help them feel confident in investing in you.

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Action Steps: (Choosing the Right Accounts to Boost Your Credit)

1.  Start with the companies you already do business with (such as banks or credit union)
2.  Ask questions about the terms and conditions so you have a clear understanding
3.  Compare different offers and look out for differences in interest rates, finance fees, etc.
4.  Use only a small portion of the cards each month so paying off the balance each month is easy.
5.  Pay your bills on time, all the time.

If you follow these tips consistently then your credit score will increase in no time. So you will be at an advantage of acquiring even more favorably loan options in the future.

Key Takeaway (Choosing the Right Accounts to Boost Your Credit)

Regardless, of the starter or small accounts you decide to go with, take the time to do some research and learn about how small and starter accounts can help you define your credit status and create good credit over time and through commitment. It is important to take the time to invest in your own future by learning about the financial world and how loans and credit work.

They may seem intimidating and like something you can not understand, but with a little work and possibly a little help you can learn the tools and habits you need for a successful financial future. Aren’t you and your family’s future worth it?

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