Use your line of credit wisely.
The most effective way to establish and maintain good credit is to create and stick to a budget and plan of action. Utilizing credit accounts properly allows you to demonstrate good payment history and increase your score. When establishing good credit fast, start with your available lines of credit and then add more as your budget allows. The process is moderately easy, but you must monitor your credit accounts to achieve the greatest success.
Instructions
1. Start a credit file with PRBC, a consumer credit reporting agency that maintains a record of bill payments. Bills paid on time and in full are reported favorably. "Alternative credit" offers a way for consumers to build good credit.
2. Speak to your local bank manager about obtaining a new line of credit, if you do not already have one. Review all available credit options and negotiate the lowest interest rate possible. Secured lines of credit are also available; however, you must back the line of credit with an asset.
3. Build good credit by utilizing 30 percent or less of your credit line. Maintain a wide gap between your charge balance and your line of credit to establish a good payment history, which creditors view favorably.
4. Pay off your monthly balance to maintain a low debt-to-income ratio. Pay off your balance two to three business days before your billing cycle closes to receive a zero balance reporting on your credit report.
5. Pay above the minimum balance if you cannot pay off your entire monthly balance. Pay as much as possible, but avoid overextending your budget.
