6921648914_9cca91bc9a_zReally? Spending more can build credit faster? Sounds crazy right? Well, it’s true. It turns out it’s a misconception that a lot of credit cards can actually damage your credit rating; as a matter of fact, canceling your credit cards and moving your debt balances around can make matters worse.

It’s important to remember that even the smallest mistakes can affect your score, and financial blunders can take years to restore. The good news is, that building credit in the shortest possible time is an achievable goal, but before you take any random advice from your friends and family consider the following credit insider tips.

1. It used to be that if you didn’t have a credit history, it was hard to get a credit card, but not anymore thanks to pre-paid (secured) credit cards and most financial institutions offer them now. Prepaid credit cards are typically in the amount of up to $500.

Before you apply for a secure credit card, make sure that they report to all available credit bureaus, because that’s the only way you’ll be able to build credit until you have options available to you. Building good credit with a credit card (secured) usually takes about 12 to 16 months.

2. Keep your credit card debt under control – This takes credit responsibility; just because you can put it on a credit card doesn’t make it free (for some reason this is how so people feel about credit cards). To attain the best possible credit score, you need to use your credit cards every month.

If you don’t use your credit card (s) you’ll miss out on positive reports. That being said, don’t spend over 10% of your total credit limit. To make the numbers work in your favor you can either cut back on your spending or increase your credit limit to make this debt utilization ratio work in your favor.

3. Always, always, always pay your bills on time! A whopping 35% of your credit score points are based on a long history (7 years) of on time payments. For the perfect 850 score, you can’t have a negative record of any kind, including judgments, accounts that ended up in collections, charge offs, liens or bankruptcy. If you’re just starting to earn credit you have a chance to do everything right the first time around.

4. Individuals who have a perfect 850 credit score usually have at least one credit card, student or auto loan and/or home loan on their credit report, with each of the accounts being open and active. People with a variety of credit account types are seen as financially stable and responsible.

This doesn’t mean you should dash out and apply for a hefty student loan; instead, start with credit card and an affordable loan to get your credit history established.

Achieving the perfect 850 credit score by spending your way to building credit faster does take some planning and time, however it is an achievable goal if you follow these tips and be “credit responsible”.


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