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Ways to Build Your Credit History from the Scratch

A credit score is a number, which plays a significant role in your finances. Whether you are looking to apply for a loan or for a card, your credit score will determine the status of your application. Individuals with a high credit score find it easier to get their application approved.

You may check your credit score online and take steps to improve the same. It is also possible to have a zero credit score. Here are some ways in which you may build your credit line from scratch.

  • Take small steps

You cannot apply for a number of credit cards at the same time. If you apply for many cards at the same time, multiple inquiries will impact your score in a negative manner. If you start slow and apply after a thorough market research, you may become a rational card user. You need to carefully choose the cards you apply for. You may apply for some of the highly rewarding cards after you have built a strong credit score.

  • Pay on time

Always pay your dues on time. Whether you have a monthly installment for a loan or credit card dues to pay, make sure that you do not default in the payment and are regular with the same. Paying the outstanding amount before the due date will help you build a strong credit score, which will be beneficial for you in the future as well.

  • Try a secured card

A secured card is a card where you deposit a lump sum amount of cash and spend against that amount in credit. Secured cards will report the balance to the credit bureaus, which will help you improve the score.

  • Keep track of your score

Once you have established a score, it is important to keep a track of the same. Do not forget about it while you continue to use the cards. You may check the score online through the credit rating bureaus and consistently work to improve your score.

There are several pros and cons of using credit cards and it has a direct impact on your credit score. With a higher credit limit and a low outstanding balance on it, you may maintain a high credit score. Additionally, you need to ensure that before you apply for a loan, you have paid off all your past dues. Building a credit score from scratch is easy, but maintaining a positive score is tough. Keep a record of the cards you own and follow your scores on the same.

Vikas Agarwal
the authorVikas Agarwal
Vikas Agarwal is an IIT-Varanasi graduate in Chemical Engineering. He is the Founder and CEO of - an investment advisory website. He is a Business Development Professional but a Value Investor at heart. He writes articles on Finaacle, which focus on simplifying the art of investing and the causes of human misjudgment when it comes to investing. He also shares his experiences as an investor and lessons from some of the greatest investors of all time.

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