Starting from Scratch: A Guide to Building Your Credit Score

Establishing credit takes time, but it's not as daunting as it may seem. Having a solid credit history can improve your chances of being approved for things such as credit cards, car loans, and even a mortgage loan. If you're starting from scratch, check out these tips for building credit.

• Keep track of your credit score: Did you know that you are entitled to receive a free credit report from each of the three major credit bureaus – Equifax, Experian, and TransUnion – once a year? This free report can also be obtained through online services such as AnnualCreditReport.com. Reviewing your credit report regularly can help you identify any errors or fraudulent activity that may be affecting your credit score.

• Obtain a secured credit card: This card is similar to a traditional credit card, but requires an upfront deposit, usually around $200. Once you use the card and make payments on time, your credit will improve enough to qualify for a regular credit card with a higher limit and better benefits.

• Pay your bills on time: Late payments can have a negative impact on your credit score, so it's important to make payments on time. Set up automatic payments or reminders to help you stay on track.

• Keep your credit utilization low: Your credit utilization is the amount of credit you're using compared to the amount of credit you have available. To improve your credit score It's recommended to keep your credit utilization below 30% of the "maximum available limit". For example if your maximum credit balance is $1000, keep your current balance amount below $300.

• Avoid opening too many credit accounts at once: Submitting multiple credit applications can have an adverse effect on your credit score. It's best to be selective and only apply for credit when you need it. Onshore Mortgage, LLC. will only run your credit once and then shop your loan with multiple lenders.

• Become an authorized user on a family member or friend's credit card: This can help establish your own credit under their account, but be sure to choose someone trustworthy who always pays on time.

• Apply for a store credit card: Although these cards typically have high interest rates and limited use, they can help build credit and are easier to qualify for than a traditional credit card. Just make sure to pay it off before the end of the payment period.

• Get credit for paying utility and cell phone bills: Tools such as Experian Boost™ allow you to get credit for paying monthly bills on time, without using a credit card.

• Be patient: Building credit takes time and consistent effort. Don't get discouraged if your credit score doesn't improve immediately, and remember that responsible financial habits are key to building good credit.

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By following these tips and maintaining responsible financial habits, you can establish a solid credit history and improve your chances of being approved for a mortgage. If you have any questions or concerns about building your credit, don't hesitate to reach out to Onshore Mortgage, LLC. for guidance.