The venture to build a good credit score is sometimes aggravating and exhausting. If you have never had credit or let all your credit go to collection, the first step on building your credit scores is building or rebuilding your credit report. Anyone that understands this process will tell you your first step is to get some secured credit cards. There are some matters you need to know that will drop your credit score though. Here is what you need to know.
Secured Credit Cards
This type of credit card is a great way to establish credit regardless of your situation. Reason behind the success of this card is because it reports to the credit bureaus as good revolving credit. This card does require a deposit of your own money into the banks account, typically around $300. The good news is with a little payment history you are on your way to save because you have higher credit scores now. It’s a small investment to save lots of money down the road.
Too much credit too quick
If you apply for too many credit cards to quick, your credit score will drop. The credit scoring models look at this as high risk. I would just apply for two credit cards only, that is all your really need.
Credit History
When your credit scores are calculated the length of credit history is a factor as well. If you just applied for credit cards your credit scores could drop, but they will eventually go up. There are all kinds of factors in the credit scoring process, and if its new credit it will take some time to see improvement in your credit scores. But remember this is the quickest way to increase your score though.
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