How long does it take to build credit…….

Building credit takes at least 1-2 years unless  you get authorized credit cards through another individual.   Having a relative, friend, or spouse put you onto their account as an authorized user is one way to get instant credit.  The older the credit the better it is for the credit score. Make sure if you do decide to take this avenue that the account you become a part of is as old as possible.

Before moving ahead with becoming an authorized card holder this should be carefully considered for a few reasons. First, be sure the individual whose account history you are taking has no late payments from the past and they feel confident there will be none in the future. The second consideration is if the creditor will view you as responsible for the debt if the primary card holder defaults or goes to bankruptcy. Some creditors view authorized card holders as joint in the responsibility of bad debt. Last the primary card holder must understand that the person now holding the new authorized card has the ability to use this credit at anytime (even if they are not provided with the actual card).

If you do not want to become an authorized card holder you must start opening credit on your own. To be approved for credit you must get secured credit cards or ask your bank (where you have a checking account) if they would issue you a secured credit card. Your bank may be able to offer you a regular credit card as well but this is a case by case approval so there is no guarantee. Try to open 2 secured credit cards and use them immediately. Do not charge over 10% of the limit and pay the minimum payment, the day you get the bill in the mail rather than on time, without paying the whole account off for 6 months. This will create activity and great payment history. Once these cards are open for 6 months you can go and apply for a regular Master/Visa account. Make sure to check online to see which Master/Visa cards are likely to be approved for someone with limited credit. There are many sites you can find to supply you with descriptions of which cards are easier approval. Do not close any credit for at least 3 years since closing credit hurts your credit and the opposite is your goal. Be sure you continue to build on each credit card as you aquire more and more credit. I would try to have 6-8 credit card accounts. These might include 2-3 credit cards (Master/Visa & Amex or Discover), 2-3 store cards, overdraft on a checking account (hard to get so it should be the last type of credit you apply for). Of course some installment credit is good as well. This would include car loans or leases and a student loan.

Remember closing and opening credit hurts your credit for 1 year so time this event correctly. Don’t run out and close or open credit, once you establish it, if you are applying for a loan within a year.

“Great credit brings great opportunity”



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