Choosing and Creating Good Accounts to Boost Your Credit

Credit can be a fickle thing and complicated to the majority of us who are unsure

of how credit works. Credit is a billion dollar a year industry and while most of

that represents debt that families and individuals are struggling to get out from

under, it also represents the various possibilities that credit can offer us. When

handled appropriately and with smart decision making, credit can be a great thing

that offers opportunities and advancement to you. Most people think of credit as

how you are able to get a house, a vehicle or other loans for items of value, but

credit is also used to judge your character when you are applying for a rental, a

job or other advancement in life.

Take the time to choose and create the right accounts to reflect good credit and

then maintain those accounts to boost your credit rating and score for the

ultimate level of possibility in the future. So, how do you know which are good

accounts to have and which are ones to avoid?

There are many different types of accounts that can be obtained and many of

them are offered with enticingly low interest rates or high limits. The first step in

determining accounts that are worth your time are to read the fine print and see

whether the low interest rate will balloon after a couple of months or whether

the high limit will create a level of temptation you may not be able to avoid. Also,

only work with banks or other companies you know and trust, try to avoid ones

that are new, unstable or unknown. Besides being a smart choice for investing

your time and money in, larger, more well-known lending companies are better to

have on your credit report because they lend more weight when others are

considering lending to you.

Good accounts should be smaller ones you can pay off in full before the due date

and should be for things you need or reflect a starter account status. Starter

accounts are those that are small or through trustworthy companies with slightly

lower standards than other companies. They are often jewelry store accounts,

store credit accounts, cell phone company agreements and other small accounts.

These accounts are perfect for first time borrowers or for those recovering from

bankruptcy that essentially have to start over with their credit building. Once you

have been given the chance with a small account, it’s up to you to be responsible

with it and pay your payments on time and in full each month in order to keep

them in good standing and avoid going into debt or financial hardship.

The longer a good account is in good standing on your credit, the higher it can

push your credit rating and score. Large lenders, like real estate and car loans, like

to see that you have a few good, solid accounts that you have had for years and

never been late or defaulted on. This shows that you can not only make smart

financial decisions, but that you can also maintain loans and budgeting over an

extended period of time, which will help them feel they are making a smart

choice by investing in you.

Regardless, of the starter or small accounts you decide to go with, take the time

to do some research and learn about how small and starter accounts can help you

define your credit status and create good credit over time and through

commitment. It’s important to take the time to invest in your own future by

learning about the financial world and how loans and credit work. They may seem

intimidating and like something you cannot understand, but with a little work and

possibly a little help you can learn the tools and habits you need for a successful

financial future. Aren’t you and your family’s future worth it?

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