Tips for Establishing Credit

Building credit takes time, so it’s important to begin building your credit before you really need it. 

OPEN A BANK ACCOUNT
Establish banking relationships: Opening a checking or savings account is a good first step to establish a financial history. Use the account wisely and keep your account in good standing: this tells a lender that you can manage your money.

BE CONSISTENT
Lenders look for a stable source of income, work history and place of residence. The ability to hold a steady job can improve the likelihood of getting approved.

GET A CO-SIGNER
Applying with a co-signer may help you qualify for better credit terms. Your co-signer also takes responsibility for payment. That means any default payment on the account will also affect the credit of the co-signer.

SECURED CREDIT CARD
Apply for a secured credit card. A secured credit card works just like any other credit card, but it requires a collateral account. Your credit line will be the same as the amount in the account.

STORE AND GAS CREDIT CARDS
These may be easier to obtain than regular credit cards; they typically have lower credit limits. These type of cards can carry a high interest rate, so it is best to make small purchases and pay the full amount to avoid the high fees. This also will help build a profile on your credit report of responsible credit use and reliable payment.

UTILITIES IN YOUR NAME
Even without a credit history it is possible to sign up for utilities in your own name. Consistent on-time payments show you can manage your money.

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