How to Build Credit with Credit Cards
What Is A Good Credit Card To Build Your Credit?
Having a good credit score is essential for gaining access to financial products such as loans and mortgages. But what is the best credit card to build your credit?
The answer depends on your individual credit profile. When considering a credit card to build your credit, it is important to first understand the different types of credit cards available. Secured credit cards require a deposit before they can be used and are generally the best choice for people with poor or limited credit histories. Unsecured credit cards are typically more difficult to qualify for, but they often offer better rewards, lower interest rates, and greater spending limits.
It is also important to compare fees and interest rates. Some cards may have high annual fees or introductory interest rates that can quickly add up. Look for cards with low fees and interest rates and no annual fee. Finally, look for cards with monthly reporting to the credit bureaus. This will help ensure that your payment information is sent to the credit bureaus and can help you build a positive credit history.
When selecting a credit card to build your credit, it is important to find one that fits your individual credit needs. Consider the various fees and interest rates, as well as the rewards offered, to make sure you choose the best card for you.
– Understand the different types of credit cards available.
– Compare fees and interest rates.
– Look for cards with monthly reporting to the credit bureaus.
– Consider the various fees, interest rates, and rewards offered.
People Also Ask:
Q: What is the best credit card to build credit?
A: The best credit card to build credit depends on your individual credit profile, but secured credit cards are generally the best choice for people with poor or limited credit histories.
Q: How do I choose a credit card to build my credit?
A: When choosing a credit card to build your credit, compare fees and interest rates, look for cards with monthly reporting to the credit bureaus, and consider the various fees, interest rates, and rewards offered.
Q: What is the best secured credit card to build credit?
A: The best secured credit card to build credit depends on your individual credit profile, but some popular options include the Discover it Secured Card, the Capital One Secured Mastercard, and the Wells Fargo Secured Credit Card.
What Is A Good Credit Card To Build Your Credit – Review
Let’s talk about building credit when you’re young or in your 20s, how credit cards work, how credit scores are factored and more!
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Using a credit card is similar to someone loaning you money, you basically are “borrowing” money to pay for the charges that you’re going to put on your card, and eventually you’ll have to pay that money back.
Credit scores range from 300-850, and generally anything above 670+ is considered good. To get to a score above 700 and even up to 800 – you need to be perfect in 5 areas.
These 5 areas are called Credit Score factors, and again, you can’t mess any of these up if you want the highest score.
The factors are the following:
35% of its weighting is payment history – how often do you pay your payments on time. To get the highest score possible, you’ll need to pay off your credit card bill on time, and never miss a payment. It’s imperative that you do NOT miss a payment because even 1 missed payment can lead to a bad score. Now, you don’t have to pay it off in full every month, but you MUST make the minimum payment. Just turn on auto-pay – it’ll save you a bunch of time and headache when it comes to your credit score.
30% is amounts owed – this is basically credit utilization. Lets say you have available credit of 10,000 dollars – if you’re using more than 20-30% of this available credit, it may impact your score negatively.
Other factors include Length of Credit History (15%) – this just takes time – that’s why it’s good to start as young as possible. This is calculated as the average length of your credit history, not your total length. So it’s best to start building your credit as soon as possible and leaving accounts that are in good standing as long as you can.
Credit mix (10%), and New Credit (10%). With credit mix, just having a good mix of debt is a positive indication, that means you’re more reliable because you are able to pay many different things off at a time. Now don’t go add credit mix if you don’t need to. And then with new credit – they’re just checking to ensure you aren’t opening a bunch of new accounts quickly – because this looks risky in their eyes.
So how do we improve our score quickly?
Well it takes a long time to build credit no matter what – and you have to play by the rules – so paying off on time, not owing too much, and just consistently paying it off will be good for your score.
There is one hack I want to mention that can improve it fast:
– Get added as an authorized user on another person’s credit card (your parents) and you can piggy back off their credit history, so long as their credit is good.
– If you have no credit, one of the best is the Discover It Secured – for a non-secured card for beginners, I like the Visa Petal, Citi Doublecash or Bank of America Cash Rewards card.
If you guys want me to make a video specifically on Beginner Credit Cards or my opinion of the best cards, let me know in the comments below, this may be something I dive into in another video.
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