Six Simple Ways to Build Good Credit

If you've ever been rejected for a personal loan or a mobile phone contract because of bad credit, you probably already know by now how important it is to have good credit. Having good credit means it will be easier for you financially when dealing with lenders and providers. That's why it's very important for every responsible consumer to actively work on building their credit scores.

If you want to start building your credit score, here are some simple ways to do just that:

Make sure your bills are in your name

One of the easiest ways to build your credit is to make sure that all your bills are in your name. Whether that’s your electricity, water or phone bill, it should have your name in it because these companies often report to credit agencies. By simply doing this, you build credit as you pay your bills.

Pay all your bills on time

This simple and easy step couldn't be reiterated more. If you want to build good credit, you need to strive to pay all your bills on time. No matter the amount, you need to avoid late and missed repayments because that kind of habit is bound to reflect on your credit report. Late and missed payments are surefire ways to ruin your credit score.

Apply for a credit card

If you haven't applied for one yet, you should go ahead and do so. Don't listen to so called experts who advise you against it. Credit cards are another easy way to build credit when used responsibly. And that's the key with credits. You should apply for options with the lowest interest rate possible. Use it only if necessary then pay your bills on time by end of each billing period.

Open savings and checking accounts

When you have savings and checking accounts, lenders see that as a good sign of your financial circumstance. For them, it means stability which helps build your credit score. The more you use your accounts, the higher the likelihood of building good credit too. Just make sure you don't open too many savings and checking accounts because that will do more harm than good.

Minimize debt

This isn't always possible for everyone but you should try to minimize your debt if possible. When your outstanding debts are low and your payables are low by the end of each month, that will actually look good on your credit file. Avoid unnecessary borrowing and keep your liabilities at a minimum if possible.

Keep a job

This one's pretty obvious but we included it in the list anyway because it is another surefire and quick way to build good credit. If you keep your job and has proof of steady income, your credit score is likely to benefit from this kind of stability. Because you are earning a steady income, your lenders and providers will see your financial situation stable and favorable.