How to Build Credit from Scratch
Credit is one of the most important aspects of a person’s financial responsibility. Maybe you’ve already done a good job by saving up money, but that may not be enough when it comes time for a larger purchase like a house. If you’re without credit, don’t let that scare you. Central Federal will work with you to build credit from scratch. Continue reading this post for more information.
Knowing Your Credit Score (And Keeping Track of It!)
What is a credit score? According to WalletHub, “a credit score is your credit history expressed as a number. You can also think of it as a grade for how responsibly you’ve managed loans, lines of credit and other financial obligations over the years.” You can find out your score by speaking with a Central Federal banker or online through several websites. Check it once a year.
Opening a Credit Card
There are many types of credit cards available out there. This includes secured cards, student cards, and store cards. Speak with our bankers or store associates at retail locations to sign up for these. Since you do not have credit, you may need someone to co-sign your application. When payments are due, try to always pay more than the minimum amount. If you can pay it off in full, there are more benefits to that as well.
Making Payments on Loans and Debt
By making monthly payments, you are proving to creditors that you are financially strong enough to handle your debt. That makes them want to keep working with you in the long run. The more you can pay off, the more trust you will gain from lenders. There are a multitude of loans that will help build credit including student loans, car payments, or even a mortgage. Each type of loan requires a minimum monthly payment for you to make.
Taking Out Consumer Loans
Central Federal offers secured loans to consumers as a great way to finance the purchase or refinance of a car, recreational vehicle, mobile home or a certificate of deposit. We also offer unsecured loans such as a signature loan or an Overdraft Protection loan. Loans are available for various terms and rates based on loan type.
Paying Your Bills On Time
When you pay your bills on time, you are continuing to build your credit score. This even includes utility payments and rent. Try your best to not miss a payment, but don’t panic if it happens once or twice. Check with your utility companies and landlord to see how you can set up automatic billings with text alerts and paperless billing.
Creating a good line of credit is well worth the effort it takes. If you need more face-to-face interaction to better understand the concepts listed above, please do not hesitate to visit Central Federal. Our bankers are friendly and experienced. You can also give us a call at (573) 364-1024.