With unemployment still on the rise, people are worrying about their own financial situation. Whether you’re buying a house or car, when it comes down, it’s all about your credit score. The higher your credit score, the better chance you’ll get a low annual percentage rate and get approved for a loan.
If you have bad credit or no credit, there are many ways to increase your credit score. Most people would start out with a credit card and start building credit that way. Others may get a 10000 car loan and build it up that way. As long as you’re able to consistently pay a monthly bill, you will slowly build your credit into a good credit score.
If you have a stable job and can afford to pay an extra hundred or two a month, consider looking into a 10000 dollar loan to build up your credit.
The small loans wouldn’t help much because you’ll pay it off too fast. A 10000 loan is a decent amount that would probably take at least three years to get close to paying it off. Showing constant payments monthly will definitely increase your credit score. Most people are able to build up a good credit score within three years, so when you finally finish your payments, you’ll most likely have good credit.
The only problem of getting this loan to build up your credit is that since you have no credit or bad credit, you might start with a high interest rate. You may be better off getting a cosigner and get a lower APR and start building up your credit that way.
Buying a car is another great way to build up your credit score. The fact that you’re buying a car, you’re taking a secured loan. By paying off your car monthly, you are slowly building up your credit. Having a great credit score is important if you want to get a large loan to buy a house in the future.
Return to the home page of Mad Progress for additional financial and credit information or visit the financial category.