Step-by step approach to establishing a credit line

From ArticleWorld

Setting up a line of credit is important because it proves to creditors that you can pay your bills on time. In the future, if you wish to make a huge purchase like a house or car, having established some line of credit will be helpful. Here are a few suggestions to get you started.

Suggestions

1. Try to find a few banks that you might want to open an account up with.
2. Visit your bank, the one you have the major relationship with, and precede to open a $500 savings account.
3. After doing this, talk to your bank consultant and request that they open up a $500 line of credit secured off your already opened savings account.
4. When you get the $500 line of credit, go to another bank and use it to open up another $500 dollar savings account.
5. Continue to follow the first four steps until you have about 3 to 5 unpaid secured bank loan.
6. Next, be sure to pay the interest on your accounts.
7. Another way to build a line of credit is by having a cell phone, and paying all your bills on time. The only thing you must make sure of is that your bills are in your name and social security number.

Advice

Your credit history does not build up to after six months and it is also when your credit score will start to rise. It is important that you start small and then work your way up. Having good credit will take you a long ways. However, it is also important that you make payments on all your accounts successfully, which can be just paying the interest. Although, you can start closing your accounts once you have built up your credit. It is essential that you don’t overextend yourself, so not too many credit cards and loans, especially if you can not pay them all off.