Personal Finance and Investing

The last year or so has done a lot of damage to many Americans’ credit scores. With lending standards tighter than ever, it is now of extreme importance that we all work towards a strong credit score because our ability to obtain any type of credit depends on it.

Our credit score is determined, in part, by our credit history; in particular, if we have one, and if that credit history is positive. There are many ways to build a strong credit history; here’s how:

• Pay everyday bills on time and in full each and every month – Not only do loans and credit cards affect your credit score, but everyday bills do, as well. From your electric and gas bills to your phone and water bills, your payment history on your monthly utility bills can make a big difference in your credit score.
• Open a checking and/or savings account and take care of it – An active bank account is another great way to build a strong credit history. Take care of your bank account; don’t overdraw it and keep a steady balance in it, if possible. Your ability to manage a bank account is essential for developing a strong credit history.
• Obtain a credit card and never, ever miss a payment – A credit card is a great, first step in establishing a positive credit history. If you can’t snag a standard credit card, consider a secured credit card. Although secured credit cards must be secured with a cash deposit, regular payments still positively reflect your credit history.
• Choose credit over cash – When possible, choose to pay your purchases with a credit card. The more activity on your credit card the more history you can establish. Make certain, however, to keep close track of your monthly purchases and to pay off your credit card in full each month.  Remember: we must use credit to build credit, so establish a healthy respect for your credit cards and you will soon find that your credit score is making positive gains.

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