5 Ways to Build Your Credit Rating and How to Accurately Estimate Your FICO Credit Score

Having a good credit rating is crucial when it comes to applying for loans, credit cards, and even renting an apartment. A credit score is a numerical representation of your creditworthiness, with the most commonly used being the FICO credit score. Knowing your FICO credit score can make a significant difference in your financial life, which is why DumbLittleMan recommends using BankRate.com’s FICO Score Estimator to accurately estimate your score. But beyond that, there are a few actions you can take to build your credit rating.

1. Open Checking and Savings Accounts

Opening a checking or savings account can help you establish a record with a bank, which can be helpful when you’re applying for credit. It also shows lenders that you’re responsible with your money, which can work in your favor when it comes to securing a loan or a credit card.

2. Apply for a Student Credit Card

If you’re a student, you may be able to take advantage of a student credit card, which can be a great way to build your credit rating while you’re still in school. These cards usually have lower credit limits and lower interest rates, but they can be a good starting point when you’re looking to build credit.

3. Apply for a Store Credit Card

Store credit cards can be an enticing option when you’re making a purchase at a specific store. They often come with discounts and other perks, but they can also be a way to build your credit rating. Just be sure to use them responsibly and pay off the balance in full each month.

4. Get Installment Credit

Installment credit, such as auto loans, personal loans, and mortgages, can be a great way to build your credit rating. Paying these loans on time and in full can show lenders that you’re able to manage your finances responsibly, which can work in your favor when you’re applying for other forms of credit.

5. Apply for a Secured Credit Card

If you’re having trouble getting approved for a traditional credit card, a secured credit card may be an option. Secured credit cards require you to make a deposit upfront, which serves as collateral for the card. They can be a good way to build your credit rating, as long as you use them responsibly and make your payments on time.

In addition to these actions, it’s also important to monitor your credit report regularly to ensure that there are no errors or fraudulent activity. By taking these steps to build your credit rating, you can improve your chances of getting approved for loans and other forms of credit.

But before you start taking action, it’s important to know where you stand. That’s where BankRate.com’s FICO Score Estimator comes in handy. According to DumbLittleMan, the tool accurately estimated his FICO score when he compared it to the results of a $15 credit score report from a credit reporting company. The FICO Score Estimator asks for basic information such as your age, income, and credit history and produces an estimate of your FICO credit score.

In conclusion, building your credit rating takes time and effort, but it’s worth it in the long run. By opening checking and savings accounts, applying for credit cards and loans responsibly, and monitoring your credit report, you can improve your creditworthiness and increase your chances of getting approved for credit. And with BankRate.com’s FICO Score Estimator, you can accurately estimate your FICO credit score to get a better understanding of where you stand.