How to build credit (in depth) advice?

There’s almost no way to speed it up artificially but the basics are:

  • Low credit utilization. This means keep a low balance on your card in comparison to the credit limit. Keeping your salary up to date with your credit card company will increase your credit limit as your income increases (be careful about spending though! Don’t be tempted)
  • Pay off your card’s statement balance in full every month. That way you don’t pay interest and it’s generally good life advice. If you’re starting to hold a balance that means you need to track your expenses more closely and reduce them.
  • Don’t be late or delinquent on payments. If you can’t pay your statement balance at least pay the minimum payment.
  • Don’t make frequent credit inquiries. Opening a lot of lines of credit will lower your score at least temporarily. It’s okay to shop around for things like mortgages though: multiple credit pulls for loan applications in a short period of time are considered a single event (I forget how many days)
  • Mix of credit types can increase your score. For example, credit cards are revolving credit and mortgages and car payments are a different type of credit. I don’t think this means you should finance things you don’t need to finance, but if you’re looking to buy a home or car in the future these events will long-term increase your credit score assuming you make timely full payments.
  • Paying for services like utilities and cell phone payments won’t improve your credit score.

You can track all these in your credit card’s FICO scorecard. Most credit cards offer this feature. It’ll tell you exactly why your score is what it is. I like Discover card’s interface for that feature.

/r/personalfinance Thread