How to Rebuild Bad Credit - By: Stu Lieberman

5 Ways to Build a Good Credit History
Bad credit can keep you from buying a home, financing your education, and even from getting a job. This is why it's so important to build a good credit history.Starting with your first credit card, everything you do that involves credit becomes part of
your credit history. To have a good credit history, you have to use credit responsibly. But what counts as using credit responsibly?
1. Charge only what you can afford to pay
When you get into the habit of charging only what you can afford, it lets future lendersand creditors know that you are a responsible borrower. You'll find it easier to borrowmoney and get new credit when you show that you know how to only borrow what you
can pay back. Not only that, only charging what you can afford helps you avoid excessive
debt.
2. Use only a small amount of the credit you have
Maxing out your credit cards – or even coming close – is one of the most irresponsibleways of using credit. Chances are that you can’t afford to pay off a maxed out credit cardbalance. Lenders know that borrowers who max out their cards often have difficulty repaying what they've borrowed. Staying below 50 is best.
3. Start with only one credit card
Many first-time credit card users accumulate a collection of credit cards within their firstfew years of using credit. Don't do this. The more credit you have, the more you'll end up using. Learn how to be responsible with credit before you apply for additional credit
cards.
4. Pay your balance in full and on time
If you're only charging what you can afford to pay, this won't be a problem. Paying off your balance each month shows that you're capable of paying bills, something creditors and lenders want to see. Since a large part of your credit score includes timeliness of your
payments, paying your balances on time improves your credit.
5. Carry a balance the right way
Having a credit card balance isn't bad as long as you do it the right way. Make more than the minimum payment each month to pay off your balance as quickly as possible. Avoid making late credit card payments and continue to keep your balance at a reasonable level.
If you follow these principles, carrying a balance won't hurt your credit.
For more information on how to handle your budget and credit cards, or a consultation on tracking your spending visit http://www.anewhorizon.org or call A New Horizon, Credit
Counseling Services, Inc. at 1-800-556-1548.

About the Author

Been in Debt Consolidationand Credit Counseling business for over 14 yrs writing articles and information for several sites.

Article Directory Source: http://www.articlerich.com/profile/Stu-Lieberman/58357

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