Building credit is quite easy if you are willing to pay a little extra interest to your banking institution. The more credit you use, the more credit you will be offered. Many credit card companies will just go ahead and increase your credit limit, all you need do to is spend frequently, and pay off the amount owed in payments equal to a rate of paying the total debt off in about 12 months. Interest is very interesting, and the credit companies live off of it. Posting multi-billion dollar yearly profits after paying executives and lobbyists multi-million dollar salaries and perks, with new buildings popping up everywhere, advertising budgets in the multi-millions of dollars, credit is big business. It really does not take much to build your credit. Keep that debit card in your wallet, and only pay cash when absolutely necessary. Always use your credit cards for store purchases, and pay the amount owed off when you get home, on web-based banking. Credit card companies just love it when you use their cards everyday, and maybe keeping a little back from the payment, so that some debt remains on the monthly statement, will prompt the credit card companies to increase your limits. Using credit cards with bonuses for using them, preferably cash incentives, could possibly even take care of the interest that you accumulate, or at least very close to it. Check with your bank to see which credit cards offer cash incentives before choosing your credit cards.

The same scenario as outlined for credit card limit increases works for bank loans. Take out small, easily paid-off loams, with as small as an interest rate as possible. Slowly raise the amounts of the loans as they are paid off. This method will cost you the amount of the interest, but your credit limit will raise with each successfully paid off loan. In all scenarios of debt accumulation, ensure that you are not going above your means, and that you use the money borrowed to pay off the loans. Using the money for something else, you will be stuck with large monthly payments, and when added to the credit card payments and living expenses, the debt load can become overwhelming if not kept in check.

After you have paid off at least four or five increasing credit level loans, and kept your credit card debt levels at about 15 to 20 percent of your credit limit, you can start asking for lines of credit through the same bank as you are using as your main banking institution. Use the lines of credit, if for no other reason than to pay off a loan and some credit card debt, so long as you have enough expendable cash to pay off the line of credit. This can hurry your rise on the credit limit ladder relatively quickly, as banks love it when someone keeps borrowing lots of money, and pays it all off, interest and all, on time, but not too quickly. And use as many services that the bank offers, even opening an investment portfolio, within your economic ability. They don't have to be large portfolios, just so long as they are slowly increasing. Using more of a banks' offering will endear you to the bank.

While building your credit limits, you really do have to ensure that you do not bounce any checks, no matter how small. You must pay off all of your living expense debts, like rent and utilities. Any bad marks on your credit report will put you back many steps, possibly even back to your first $500 limit credit card, and starting fresh all over again, to starting over again without any credit at all. However, simply by following these basic guidelines, you should be able to build your own credit within one to two years. Good luck!

Learn more about this author, Marc Phillippe Babineau.
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