The day has finally come. You’re ready to apply for a credit card so you can start building good credit. But it turns out you can’t get one because you need good credit in order to qualify. It’s a vicious, inconvenient cycle many Americans know all too well, and it’s one that has them asking, “Where do I begin?”

That’s why LendNation is offering some tips for building good credit from scratch so you can begin building a strong path towards a future in which you can make bigger life purchases, such as a car or a home.

Start Small

If you’re just beginning to build your credit, it’s important to start small and start simple. This will not only get you on the right track to a good credit score, but it will also help you build good habits to manage your spending and stay out of debt.

Consider a secured credit card
A secured credit card is a great option for those who have no or bad credit. It’s different from a typical credit card in that your limit isn’t very high and you have to pay a deposit in order to be approved. The lender then uses that deposit as collateral. If you miss any payments or your account goes delinquent, they keep it. If you stay on track and keep your account in good standing for a number of months, you’ll get that money back while simultaneously building your credit.

Get an in-store credit card
An in-store credit card can be a great alternative to standard credit cards. Oftentimes, there are fewer or less-strict requirements, making it easier to get approved. Keep in mind though that spending limits are usually lower and interest rates a bit higher. But if you’re focusing on building good credit, you should use the in-store credit card as an opportunity to only spend within your means instead of going on a shopping spree. For example, if you know there’s a $50 item you want to purchase in the store, set that money aside before you charge it to your credit card. That way you’ll be ready to pay for it when your payment is due.

Pay On Time

One of the major factors in your credit score is on-time payments. It may not seem like a big deal to miss a payment by a day or two, but credit companies will notice and dock you for it. What’s more, a missed payment can linger on your credit score for a few years. Here are some ways to ensure your payments are on time:

  • Set your bills on autopay. One of the simplest ways to ensure you don’t miss a payment is to set all your bills on autopay. That way you never have to worry about missing a payment and hindering your credit score.
  • Set reminders. Use apps, alarms, or alerts on your phone to remind you of when a payment is due.
  • Change payment due dates if necessary. Having automatic payments can be tough for those who may not have enough in their bank account or don’t get paid at the time their bills are due. Many companies allow you to change your due date to a date that works better for you. You can usually change these in your online accounts, or simply give them a call to see what you can work out.

Set Limits for Yourself

If you’ve taken out an online loan or a credit card to build your credit, you’ve already been given a spending limit from the lender. But something to consider in addition to that is setting a spending limit yourself. It can be easy to get swipe-happy and spend beyond your means, which can quickly deter all the work you’ve done to build good credit. There are a few simple ways to set limits for yourself while simultaneously building good habits.

Only swipe when you can afford to
When it comes to building your credit with a credit card, it’s important to stay within your means. If you charge too much too soon, you’ll find yourself with a balance you can’t afford to pay off, sending your numbers in the wrong direction.

As mentioned above, try to swipe your card only when you can afford to. You can do that by setting the money aside first, then using that the following month when it’s time to pay your bill. Or, if you’re in a situation where you can’t afford to set the money aside first, make sure you work it into the following month’s budget.

Try to pay off your entire balance each month
Using the tip above goes hand-in-hand with paying off your entire balance each month. Doing this not only helps build great credit, but it ensures you don’t get slapped with high interest when you carry your balance over into the next month.

Keep your credit utilization below 30%
Your credit utilization – how much available credit you’re using – is another big factor when it comes to calculating your credit score. If you can’t manage to pay off your entire balance each month, work to keep your utilization below 30%. For example, if you have a credit card with a $1,000 limit, always try to keep your balance below $300. This shows credit companies that you’re staying within your means, which is a quality they value in borrowers.


The Credit You Deserve

At LendNation, we understand that life oftentimes doesn’t wait for you to have good credit when it requires you to cough up a lot of money at once. When you don’t have an emergency savings or credit card to help when you’re in a tough spot, turn to LendNation for a quick cash solution.

You can get a loan at LendNation with less-than-perfect credit. We’re determined to help you get money when you need it most. We offer title loans, installment loans and payday loans to get you cash fast. You can easily apply online or stop by one of our many locations for help while you continue to successfully build your credit score and secure a strong financial future.