We all like things to be easy. Ron Popeil taught us how to ”Set it and forget it” with the Showtime Rotisserie many years ago. If you’re over 30 you probably remember the infomercials from sleepless nights in front of the TV. The difference between those infomercials and what I am writing now is Ron asked you to spend money. I’m going to give you information on how to build your credit using the “Set it and forget it” method and NOT change your monthly budget or expenses.
Do you have a credit card? If you already do, you can skip part of this piece, but be sure to read all of the steps. If you don’t, pay attention closely. The following tips can change your credit in a positive way forever.
1. Choose a monthly bill that ranges from $25 to $150 and remains pretty consistent through the year. It could be your cable, cell phone, toll tag, etc. Something that is about the same amount per month all year long.
2. If you do not have a credit card, open a secured credit card. Be sure not to confuse a prepaid card with a secured card. While there are several options to get one, my suggestion is Capital One. The approval process is painless and the limits start as low as $200. Open the secured card with a limit 3.5 – 4 times the bill you have selected. EX: If your cable bill is $150 open a card with a $525 limit. You control the limits on a secured card with your deposit.
3. Once you have your secured card, set up the bill you have selected to be auto-paid by your credit card. You will never be late on the bill, and your card will have usage on it monthly.
4. When you have finished setting up the bill for automatic payments, put the card up. Don’t carry it, don’t use it, forget you have it. (Not completely, there is one more step you may need the card for.)
5. Set up your credit card to be automatically paid from your checking or savings account on or before the due date for the full balance. Now you can forget about the credit card and leave it locked up in a drawer. The steady activity, appropriate usage and on time payments will build a positive payment history without you having to do anything.
This tip is for everyone. A long payment history on an account in good standing with little or no balance will be one of the most beneficial things you can do for your credit. Remember, 35% of your credit score comes from payment history, 30% comes from balances and usage, and 15% comes from length of history. With a little time this one passive tip can influence 80% of your credit score.
MSI Credit Solutions provides superior credit restoration and comprehensive consulting services that are reliable and affordable. For any questions or to schedule a free credit consultation, contact us at (866) 217-9841.
*The information in this article has been provided strictly for educational purposes.