When you have a bad or no credit history, it can restrict you from doing so many things. Credit history is an essential factor when you are applying for a credit card in the US. If you are an immigrant or have a bad credit history, here are some tips that you can use to build your credit history.
Avoid Having Many Credit Cards
A lot of people apply for so many credit cards when they start using credit cards. You should not make the mistake of applying for so many credit cards. The reason being, when you have many credit cards, it will be challenging for you to keep up with the payments and balances.
When you have too many credit cards, it results in so many inquiries that can affect your credit score negatively. You should know that 10% of your credit score is from credit inquiries, and getting a new credit card lowers your credit score. So, you can take your time to learn to be responsible with your credit card before applying for an extra credit card.
Use another Person’s Credit
If you have a relative or a friend who has a good credit history, you can use their credit cards. They can list you as an authorized user and use their account to build your credit history. As an authorized user, you also have no liability, so it is not that risky for you.
But you should be careful. Ensure that your friend or family who lists you as an authorized user has a good credit history and is a responsible person. You should avoid becoming an authorized user in an account that has a bad history and a debt. This is because these negative issues will also reflect in your credit history.
Look For Secured Credit Score
When you have no credit history, you can use a secured credit card. These types of credit cards are easy to get even if you have no credit history or poor credit score. You can use a secured credit card the same way as a regular credit card and build your credit history. You can visit here to learn more about using secured credit cards.
Avoid Closing Unused Credit Cards
Another tip that you can use is ensuring that you keep unused cards open. But you should ensure that they don’t have annual charges. Since when you close your accounts, it will increase your credit utilization ratio. When you owe the same amount but have few open accounts, it will lower your score.
The main difference between a secured credit card and unsecured is that with a secured card, you have to make a security deposit. The amount that you deposit becomes your credit limit. For example, if you deposit $500 as security, your credit limit will be $500.
If you want to improve your credit score, these tips should help you. You can visit here for more information on the credit score. So, always be disciplined. Remember that a good credit score can open so many doors for you.
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