Date: 1 Aug 2009 Comments: 0

Building up your credit score is a hugely important part of having a solid financial future. Having poor credit will cost you a fortune in your lifetime because everything is more expensive with poor credit.

I struggled for years with a bad credit score and honestly, it was REALLY embarrassing. I had to put down deposits to get cell phones and even to get satelite television. I never wanted to get into anything that would require a credit check because that would show people how irresponsible I had been with money.

I finally decided that I was going to make a change and build up my credit. This was a long road but after a while I learned exactly what I needed to know, created a plan, and executed that plan. The last time I checked my credit score it was 770. I suspect that it's now a little higher than that.

The Plan

When I first started, I couldn't get regular credit cards. I even tried to get an unsecured credit card for bad credit and was denied. You know you've messed up your situation when you can't even get cards created for people who have bad credit. Basically what I had to do is start with secured credit cards. This was expensive but worth it. I paid $300 or so to get a card that was secured and started there.

After about 4 months, I started getting new credit card offers for regular cards. At first they had really low limits but after a while they started to get better. I was able to get an unsecured, regular card with a $1500 limit before too long.

Once I had my credit cards, things started to improve a lot. I paid them off every time on time in fact I haven't made a late credit card payment in the last 5 years. I forced myself to commit to the fact that I would not pay my cards late - no matter what. I sometimes pay other bills late but I am perfect on paying bills that affect my credit score.

I try to keep very low balances on my credit cards because it's such a large part of your score's calculation. If you have a high balance on your cards it's definitely going to bite you on your FICO score. The lower your balance is, the higher your credit score is going to be.

Building your credit is actually a fairly simple process. You need to get a few credit cards, make your payments on time, and keep your balances low. You also want to keep the same cards because the length of your credit histories is also important. This will allow your score to get better over time if you keep working on it.

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