Building Your Credit

Giving Credit Where Credit is Due: How to build from the ground up

I remember six years ago when Megan and I had just got married. Megan had a credit score of zero. This isn't a good thing, nor is it a bad thing, she was just starting a new chapter in her life.  We were in a furniture store trying to get her a credit card to buy a couch even though we had plenty of money to pay cash for it, we wanted the card just to help her build up her credit.  She got denied for the card!  It was so frustrating, I had just sold a few houses and we could have paid cash for several of those couches but they wouldn't give us a credit card for it.  

Getting Started With your Credit:

Coming up here in a few months is College graduation and many students are going to be hitting the work force for the first time in their actual careers.  A couple of years after that, hopefully, they will be calling me to buy their first house!  Typically they will rent a place for six to eighteen months then start looking for a home to call their own, which is normal. It isn't as easy for young people to obtain a loan as it was just a eight years ago. Creditors are getting tighter with what they are requiring, which is making it harder and harder to obtain a loan.

Here are a few good ways to get your credit rolling. 

    1. Start a savings account. Most people already have a checking account but not a savings account. You really don't need all that much money in it you just need to have it. Creditors will like the fact that you have money set aside.
    2. If you're like me, when you graduate college, you will still driving the same car you had in high school and you will hate it. So you're going to want a new one since you're now making real money and can afford the payments. Make sure you purchase something that you can pay off aggressively, having a car loan can be a big burden.  I would get something modest that you can knock out in a year or two.
    3. Before you even graduate college open up a credit card. You don't need a huge limit and definitely don't carry a balance on it, just have it. Put just a few purchases on it a month and pay off the balance every month.

If you follow these three things, it should get you started on producing a good credit score. Once you have established credit and are looking for your first home, call me and I can help you find what you are looking for!

Learn More:

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