The BEST way to begin building your Credit Score for FREE (For Beginners)
Here’s exactly how you can begin building your credit score – without paying any interest, for completely free, and in only 20 minutes. Enjoy! Add me on Snapchat/Instagram: GPStephan
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So here’s what you do to build up your credit, and this is how easy it really is:
Step 1: Go to your bank – really doesn’t matter which one – and get what’s called a “secured credit card.” It’s secured because they “secure” the card with your own money which is put as collateral against your credit line. That’s as simple as it is. Now if you can qualify for an unsecured credit card, meaning all you do is apply and they give you a card without a deposit, all the better – this isn’t too common for people just starting out, but it does happen. It’s very important that when you do this, make sure the credit card doesn’t have an annual fee. The goal of this should be to build your credit entirely for free – and annual fees are usually a total waste, anyway, unless you’re receiving big rewards, which isn’t going to happen when you’re just starting out – so avoid anything like that.
Step 2: This is all common sense. But pay off the card on time. Just charge some minimal stuff to it and pay it off when it’s due – ideally pay it off in full. You do not need to carry a balance and pay interest to improve your credit score – this is a myth and it makes zero difference. Again, the goal is this is that it should be free – so don’t give the credit card companies any of your money. Pay off the bill in full. And you don’t need to charge a ton of money to the card, either. I just recommend putting small charges on it – even if it’s only the occasional gas bill when filling up your car, or when you get some dinner – just minor things.
Step 3: Do this for 6-8 months. Charge a few things to the card, then pay it off in full. Super easy. Just repeat this each month and you’ll slowly accumulate some credit history. But this is where it starts getting fun…now that you have some history to show “I’ve paid my bill off on time and in full, and I don’t do stupid things with my credit cards,” other companies will begin trusting you with their cards, as well…so after about 6-8 months, it’s time to graduate from your secured card or a “basic card” to a “Real” credit card. My favorite first unsecured card would probably be the bank of America cash rewards card.
Step 4: Slowly add more cards into the mix. Generally, you can improve your credit score with the more lines of credit you have available to you. It shows banks that you have more access to capital, can handle multiple credit lines successfully, and this makes them more confident when lending you money at a low interest rate. But step 4 is where the fun starts…this is called Credit Card Churning. This is where you’ll get a credit card for the sign up bonus, get the points, and then redeem it for free travel, hotel stays, or really almost anything. If you can get it, I really like the Amex Gold.
Step 5: Just continue paying them all off on time. That’s it. It’s super easy and the entire process of starting shouldn’t take you longer than about 20 minutes of your time. By far this will be the most productive and profitable 20 minutes of your time in your LIFE if you don’t already have a credit card, or aren’t yet old enough to get a card – just do this the week you turn 18 and you’ll be in great ship to later invest in real estate, get the best deals on just about any loan out there, and just be a responsible adult.
For business inquiries or one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness@gmail.com
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