4 of 30

Write now Article Tools

Page 2 of 2

the amount of the interest, but your credit limit will raise with each successfully paid off loan. New and used car loans are especially attractive to credit companies (banks, credit cards, etc.), as well as big ticket items like large screen televisions and stereos, furniture, anything that stimulates the economy).

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. However, simply by following these basic guidelines, you should be able to build your own credit portfolio to between $5,000 and $10,000 within one to two years. Further growth is easily made by increasing the number of loans you successfully pay off.

Good luck!

Learn more about this author, Marc Phillippe Babineau.
Click here to send this author comments or questions.

• << previous page
• 1
• 2

Add your voice

Know something about How to build your credit?
We want to hear your view. Write now!