Building a solid credit rating from scratch is not as difficult as one might think. The reality is that you can establish a decent Credit Score in as little as 3 months and have a solid rating around the 12 month mark. From that point, if you maintain proper borrowing habits, you can have an impeccable rating for the rest of your life.

The key is to have a basic understanding of what actions affect your rating and to follow a basic strategy design to keep you within the limitations of those influences. If you are starting from scratch, never having had credit, here is an easy to follow step by step guide to establishing your credit. As well as suggestions on avoiding a few pitfalls along the way which could hurt, instead of helping if you fall into them.

Step 1) Check Your Report

While it may seem ironic, even if you know for a fact that you have never had credit before, checking your history is the first step. Your report contains more than just credit accounts on it and may have inaccuracies pertaining to other areas. I had a $500 phone bill attached to my report of which I had nothing to do with. In fact, it was tried to a business I worked for but had no ownership in nor any ownership responsibilities. Read more

Having good credit is almost a necessity on today’s world. In most cases, credit it essential to owning a car or home, and with the proliferation of online shopping it’s hard to be without a credit card. Unfortunately, some people get into trouble with their credit. They miss some minimum payments on their credit card, or let a loan go into default. When this happens the creditor will report it a credit reporting agency, who will add it to your credit history. Once your credit history is blemished, it can be difficult to repair: most things will stay on your credit history for 7 years before they are removed.

Once you’re in a situation where you have a bad credit history, you’ll find yourself dealing with many previously unknown problems: you won’t be able to rent cars or purchase things online; landlords will hesitate to rent property to you; a mortgage may be difficult or impossible to get. This is why it’s important to engage in credit repair as soon as possible: you can do wonders for your credit repair by taking proactive an early action. Read more

Question: I’ve had trouble paying my bills on time in the past and now my credit record isn’t the best. I’ve seen advertisements for credit repair services. Do they work?

Answer: Hard work and the passage of time are the only tried and true methods of repairing a blemished credit record. While there are a variety of legitimate options to reduce debt, some companies offer false promises to erase your bad credit or help you qualify for lower interest rates.

If the information on your credit report is accurate and timely, it can’t be changed or removed. Individuals have paid hundreds or even thousands of dollars to companies that simply can’t provide the services they claim. Steer clear of companies that guarantee they can erase bad debt from your credit file or fail to tell you your legal rights and what you can do to help yourself.

Your credit history is maintained by private companies called credit bureaus that collect information provided by banks, credit card companies, mortgage companies and other creditors. The three major bureaus are Equifax, Experian and Trans Union. You can request an annual free copy of your credit report online from each of these bureaus at www.annualcreditreport.com or by calling (877) 322-8228. Read more