A very high credit score is essential for getting essential products like loans, lines of credit, mortgages, and investment accounts. It is even an important factor in getting employment, relationships, finding housing, and other important social aspects; however, for many people getting there start in the credit world is tough because no one will approve them for a simple credit card.

You might of never had a need for credit or have had bad credit experiences in the past; however, you are not out of luck.

Going from 0 to 500

The first step to getting or rebuilding your credit is to get a few credt cards, but how will you get one if you get declined for every credit card application you make? Banks view you as very risky; however, many banks offer programs where you put $500 down on a secured credit card, that way when you shop with your credit card, you are using your own money. The fees on this card is limited; however, you have to come up with the initial $500 to start building your credit.

Once you have the secured credit cards, make sure that you are making all of your monthly payments on time, every month. Once you have been using this credit card to build your credit rating over the first year, then your credit report should be established enough to apply for unsecured credit cards.

From 500 to 800

Once you can begin getting unsecured lending products, you must follow these key rules in order to ensure that you maintain and build your credit rating:

• Pay your bills on time every month – This is extremely important, because the banks want to know that if they lend you money, then you are going to consistently make the monthly payments to pay off the loan. If you fall behind on your payments, then make sure you pay them as soon as possible. If you have anything go to collections, then this will have severe negative effects on your credit report. Do not let this happen.
• Keep revolving balances low – If you have credit cards, then try to pay off the balance at the end of each month. Many banks can setup your account so it will automatically withdrawal the funds from your bank account. High balances will negatively affect your credit report. Do not close old credit cards, the age of the account will keep your credit report strong. Old credit cards have a higher benefit to your credit report then new cards.
• Applying for Products – The credit bureau understands that people shop for loans, lines of credits, etc. to try and get the best possible rates. If credit reports are checked within days of each other, then this will not have much of a negative impact on your credit score; however, if you are completing credit checks on a monthly basis, then this will have a largely negative impact on your credit report.
• Limit Your Credit Cards – The average age of your credit products affects what your credit rating is. It is better to keep old cards and refrain from getting new credit products. It is always better to use an old product, then applying for a new credit product.
• Managing Your Credit – Do not apply for every offer that comes your way. When you get pre-approved applications in the mail, throw them away if you don’t need them. Only keep what credit you need and don’t carry too many unused credit cards; however, don’t cancel cards if you are not using them.

What’s in it for me?

When you have an extremely high credit report, there are many things that you can get that you wouldn’t be able to get with no score. The following is just a few of the examples:

• Employment – Some companies require a minimum required credit score for new employees.
• Housing – Most mortgages require a minimum credit score for you to be approved. Also, you can get better interest rates with a better score on your mortgage. Many landlords require a minimum credit score to rent a property to an individual.
• Credit Cards – Most cases you are required to have a minimum score to get approved. Higher benefits are on credit cards that require a higher credit score to be approved. Also, the rates can become lower if you have a better credit score.
• Lines of Credit/Loans – These require a higher credit score to get approved. Usually, these products have lower interest rates then credit cards.
• Mortgage – The higher your credit score, the bigger house you can get, the lower the mortgage interest rate you can get.
• Saving Money – With a better credit score, you can usually get a much lower rate on many lending products. This, in turn, will be able to save you a lot of money on interest rates over the years by keeping a good credit score.
• Relationships – When seeking a spouse, most people will not want to be with someone who cannot handle money, get approved for credit, or get a mortgage. This even applies if the person is making a six figure income because you will still require a good credit rating to get many of the better things in life.

By following these steps, you can go from a horrible credit rating to an extremely good credit rating. This will be able to open many doors in your life, and make your life that much better.

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