Top 5 Secrets to Build Good Credit

When you have a good credit score it means that you can be trusted; you are responsible in managing your finances. You can enjoy the benefits of getting lower interest rates on credit cards and mortgages when your credit rate is excellent. Therefore in order to take advantage of these benefits you must start building a good credit rating. How should you do that? Here are the best kept secrets banks don't want you to know.

1. File for a loan from banks of your choice. Yes you've read it right! You can begin doing this with three banks, but if you can handle the interest payments then you may go for more banks. Inform the banker that you are building credit for your business. Make sure that these banks create reports to credit agencies because if they don't, this wouldn't make sense.

2. Now that you have money, deposit part of it in a three month CD (Certificate of Deposit). $1,000, or higher is the best value you should invest. Repeat this process with the rest of the banks you filed a loan from. CD is like a time deposit wherein you can't withdraw the amount you deposited until the maturity date. However, a Certificate of Deposit offers bigger interest rates compared to other investments.

3. Do not deposit all your money into a three month Certificate of Deposit. Take some amount to open a savings account at the banks where you also acquired your certificate of deposit. Once you have it, be sure not to withdraw these deposits.

4. After 3 months, withdraw your CDs. At this point you have gained enough good scores on your credit report through the banks you are affiliated with. But you have to be careful with CDs because banking institutions impose penalties to those who could not meet its terms and conditions. So the best way to stay away from being hassled is to wait until your certificate matures-you can do whatever you want with your investment thereafter.

5. The last thing you have to do is to pay your loans using the money you invested into the 3-month CD. Cash in the CD so you no longer have any liabilities in these finance companies.

Easy steps right? Hold on to these simple steps. They are effective tools of debt elimination. With these steps handy, you'll build an excellent credit rating in no time.

Allan B. Henry has been in the field of credit repair for a long time and maintains a website about debt elimination where you can get answers to the rest of your questions.

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