Learn How to Establish Good Credit: Back to Basics

How You Can Build Your Credit

Build your credit successfully from scratch with these strategies:

1. Open a bank account if you don’t already have one. This will help you with your local bank. When you’re a reliable customer, it will help in the future. Remember that your local bank has a credit card program. They also provide other types of lending.

• While a bank account won’t affect your credit score, it can help you to acquire credit with your bank.

2. Ask your bank for a secured loan. Ask for a loan against your savings account balance. You can easily borrow 90% of your current balance. Banks love to make these loans because they can’t lose money. If you default, they’ll take the money out of your account themselves.

• Take the money you’ve borrowed and use this same money to pay off the loan. Make a few payments and then pay off the full amount.

2. Acquire two credit cards. This can be very easy if you’re a college student. Fill out a few credit card applications and see what happens. If you can’t acquire a conventional credit card, look into secured credit cards. After using a secured card responsibly for several months, you should be able to get a conventional card.
3. Pay all of your bills on time. Thirty-five percent of your credit score is related to your payment history. Late payments can be recorded with the credit bureaus and damage your budding credit score. This includes your utilities and even possibly your rent. Sit down once a week and pay your bills so you can keep a handle on them.

• Avoid getting two of the same type of card. Mix it up. Get a Visa or MasterCard and an American Express or store card.
• Use the cards regularly, but only for small purchases. Be sure to pay your bill on time and avoid carrying a balance. Each month, pay off what you’ve charged.

Building a good credit score requires time and a few simple steps. It’s important to be responsible and pay all of your bills on time. Avoid making unnecessary purchases. The best time to begin building credit is before you need it. A well-established credit history can make your financial life easier.