SuperTalk Mississippi

New Year’s resolution: build credit

JACKSON, MISS– Building and repairing credit is a task that takes time, patience, and responsibility; but it’s also tricky. That’s why News Mississippi sat down with a financial adviser for advice on credit scores, borrowing, and building credit history. 

“Credit is a catch twenty-two,” said Brent Walker, financial adviser at RiverTree Financial in Flowood. Walker says you have to borrow to get credit, but you may need credit to borrow from a reputable lender. So how do you get started on building your credit?

“Borrowing money is never fantastic,” said Walker, “but borrow a little, and pay it back over time, on time. That will build your credit.”

Walker says to avoid incredibly high interest rates due to the lack of credit, there’s a course that takes longer, but is safer in the end.

“Save up a little money. Five hundred, or a thousand dollars, and put it in a savings account,” said Walker, “then tell your bank you want to borrow against your savings account. They lock that savings amount, then write you a check. Keep that money and slowly give it back over six months or a year.”

Walker says that builds two things: your credit, and your discipline to make payments on time. But if you already have the money in the bank, why would you take a year to give it back? Walker says it’s because it has to have time to report to credit. Your credit report isn’t just about your numbers, but your behavior.

“If you pay the money back quickly, it may not have time to report,” said Walker, “plus it doesn’t show that you are consistent in your behavior on your credit report. Take the time to pay it off, and show lenders you can handle payments on time.”

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