Whether you are young and have no credit, or just need to build it back up, simple steps are all it takes to improve your credit score!

Things You Will Need

Computer and Internet Access

A job or other income

Step 1

Starting out with no credit at all gives you a little bit of an advantage, because this way you have no negative aspects working against you besides a short history! If you have suffered from bad credit though, you have to be careful and smart about building it back up.

Step 2

First thing you need to do is pay off those credit cards. If you can't stop your impulses to spend with them, then freeze the account. Then make steady payments every month until it is paid. DO NOT close the account! You should look at your credit as a fraction: your amount of debt over the total credit that is available to you. Say you have a credit limit of 500$ and you have spent 230$ that leaves you with 270$ of your available credit.

Step 3

If you have to build your credit from scratch, apply for a credit card or two, and start making small purchases that would normally be paid with in cash. Create an online account, and right after you buy something, gas for example, pay the amount off. When you pay it off online it goes through right then and the money gets taken out of your checking/savings account! If you keep doing this, it will build your credit quicker and give you a better score!

Step 4

You have bills every month, so see which of those bills are actually reported to the credit bureaus. Cell phone companies, credit unions, and banks are just some of the bills that are reported. If you rent, you can ask your landlord to report your rent payments as well, this will also increase your credit score!!

Step 5

Its best to use common sense when building credit back up, or building it from scratch. If you can't afford to pay with cash, then don't create debt just to buy it. Credit cards should be used for emergency bills, and/or making smal purchases that you pay off that month.

Step 6

What negatively affects your score? Having too many credit card accounts open. Applying for too many credit card offers, having a higher debt over credit ratio. Cancelling accounts, keep your accounts open, just make sure they are all paid off!! Some bills not being reported won't hurt, but they won't help either!

Building your credit does take time and planning. But it is an act that will improve your financial future!

Tips & Warnings

Be smart! If you can't afford it, don't create debt! Paying off bills isn't fun, its a fact of life. Most credit companies will work with you, so call and ask if you have options when paying bills.