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The easiest (and cheapest) way to start building credit is by getting a low limit credit card. AND keeping your debt to credit ratio very low, this is key. I can't stress that enough. Debt to credit ratio is the ratio between your credit limit and how much you spent/charged. Lets say that you get a card with a $250 limit and you charge $25 to it in one month. Your debt to credit ratio would be 10%. By keeping your debt to credit ratio low it shows lenders that you're responsible. Basically you have credit available to you but are responsible enough to not use it and rack up debt. I remember that a few years ago Equifax said that the average debt to credit ratio for people with over 800 scores was 7%. Last I checked my score was a 787 and my credit card debt to credit ratio a 1.6%. BTW NEVER carry a balance, you build credit by your payment history, not by carrying a balance.
The easiest (and cheapest) way to start building credit is by getting a low limit credit card. AND keeping your debt to credit ratio very low, this is key. I can't stress that enough.
Debt to credit ratio is the ratio between your credit limit and how much you spent/charged. Lets say that you get a card with a $250 limit and you charge $25 to it in one month. Your debt to credit ratio would be 10%.
By keeping your debt to credit ratio low it shows lenders that you're responsible. Basically you have credit available to you but are responsible enough to not use it and rack up debt.
I remember that a few years ago Equifax said that the average debt to credit ratio for people with over 800 scores was 7%. Last I checked my score was a 787 and my credit card debt to credit ratio a 1.6%.
BTW NEVER carry a balance, you build credit by your payment history, not by carrying a balance.
