Credit.  Everyone needs it, not everyone wants it, and when you need it most, it is hardest to come by.  Building a positive credit rating takes time and careful management, and cannot be done overnight.  There are several ways to build it, and depending on what stage you are in of your life or career, it can be easier or more difficult to do.

Building Credit

The first step towards building a positive credit rating is to get some credit.  For most individuals, that first piece of credit is going to be a credit card.  Credit cards are a relatively easy product to attain, even for individuals with no history whatsoever.  Most companies are eager to target new customers and will have exception programs designed to approve post-secondary students with little more than some identification and proof of enrollment.  This is a great way for a younger individual to get started, as it will allow them to avoid being declined due to a casual employment status or a lack of income.

Generating Positive Credit History

The next step is actually building a positive credit history.  This is done by utilizing your credit and paying it off on time.  Missing payments can damage your credit score, as well as lead to your credit card provider increasing your interest rates.  To ensure this doesn’t happen, set up a pre-authorized minimum payment on your card.  That way, even if you forget, the payment will automatically be drawn when due and the reflection on your rating will be positive.

Another thing to be careful of is over-utilization.  This occurs when your balance owed is close to the limit on the card, and is maintained there for a long period of time with little progress made towards paying it down.  This will slowly begin to reflect in a negative manner on your credit report, and will eventually drag your rating down.  The moral is to pay down balances owed on a regular basis.

Grow Your Credit Rating

Finally, the last thing you’ll need to grow your credit rating is time.  Rome wasn’t built in a day, and a high credit score can’t be either.  A long history of careful management is the most foolproof way to ensure you grow and maintain a good score.  It will allow for your regular and on time payment history to push any missed payments or other blips into the past, and will show creditors that you can be trusted to pay back any funds you borrow.

If you’re planning on buying a house, booking a flight, or even making most purchases online, you’re going to need credit.  Having a good rating can be attained by being responsible and ensuring you are making your payments on time, and making sure you are not maintaining a long-term balance close to your limit.

Final Thoughts

Good credit takes time.  With your credit rating, there is no quick solution as it is based on your history.  Use it in a responsible manner, and you will be able to attain, maintain, and reap the benefits of an excellent rating.