Building Your Credit by Wisely Using Your Personal Loan

Not many people may know of it, but there are actually ways for you to build your credit just by using your personal loan wisely. The process involves a couple of methods and good financial choices that will funnel the positive credit to your favor.

If it happens to be your first time hearing about this, there is no need to worry. Familiarity is always your friend. That being said, the following tips will assist you in building up your credit using your personal loan.

1. Keep Your Debt-To-Income Ratio Low.

The first way to build your credit using a loan is to keep your debt-to-income ratio low. It means that if you have a loan worth $1,000, you should only have a monthly income of $1,000. If you have $2,000, your income should be twice the amount.

The debt-to-income ratio is used to compute your credit score. The higher the debt, the lower your credit score. The lower the debt, the better your credit score.

2. Keep Paying Your Credit Bill on Time.

It is also essential to keep paying your credit bills on time. If you miss a payment, your credit score will also be affected. You can use your credit score in buying a house, a car, and many other things in the future.

3. Do Not Use Your Credit Card to Buy Luxuries.

Using a credit card to buy luxuries will also affect your credit score. Your credit card is a tool to help you have a better life, not a way to help you have a better lifestyle. If you want to spend on something you like, save money just for that.

4. Do Not Carry a Balance.

The bank will charge you high interest rates if you carry a balance. That being said, if you can pay the balance in full each month, you can save a lot of money.

5. Do Not Use Your Credit Card for Cash Advances.

You can only use a credit card for cash advances in case of emergencies. If you need some cash and you have no way of getting it, that is when you can use your credit card for cash advances. If you do not have a real emergency and need cash, you should avoid doing so.

6. Set Realistic Goals for Yourself.

Avoid having your head in the clouds when you are building your credit. It would be best to settle for what is realistic for you and your family.

7. Be Responsible and Learn How to Handle Your Finances.

It is essential to understand that your credit score is affected by your behavior, good or bad. Having a good credit score equals having a good credit report.

It should be something you are responsible for. Do not be afraid to seek help from a friend or a family. With all of these tips, you will be more than ready to build your credit by using your personal loan.


To sum it up, a personal loan is the best way to build your credit rating. Remember to pay off the monthly payment on time and always use a credit card. It takes effort, but with the right information in hand, you can get your credit score up in no time.

Do not be afraid or feel that you are alone in this. There’s no need to be ashamed of your credit rating if it is not at par with what you hoped it would be, so as long as you remember to pay off your monthly on time.

If you are looking to apply for ,personal loans for bad credit in Memphis, TN, look no further than what we have to offer here at Magnolia Finance Co. Whether you are looking to build or rebuild credit, consolidate a few bills, or are simply caught in a bind, we try to make the borrowing process quick and simple. Call us today and let us discuss all your credit options.