How To Build Credit Starting From Scratch

Whether you are just starting your adult life, or trying to rebuild your credit history after the recession, here are five tips to help you to get in the credit “game”…

Building Credit Tip #1: Start with your bank.

If you have a checking account or savings account with a bank, walk in there and ask for a credit card.

The available balance does not have to be that high. And you do not have to carry a balance on a monthly basis to build credit.

Building Credit Tip #2: Try getting a “signature loan” at a credit union.

Signature Loans use the borrower’s signature and a promise to pay as collateral. This type of loan is also known as a personal or “good faith” loan. Eligibility is determined by a member’s credit history and debt-to-income ratio.

Typically, Credit Unions are a little more flexible than traditional banks. So even if you are starting your credit history from scratch, check in with your local credit union, and see what they can do for you.

Building Credit Tip #3: If you can’t qualify for a credit card, try to get a secured credit card.

You will have to put up some of your cash in exchange for the same amount in availability on a credit card.

Building Credit Tip #4: Get a cell phone in your name.

You can also establish credit by paying for a cell phone bill for at least 6 months. Make sure the account is in your name, to get the credit building benefit.

Building Credit Tip #5: Get a co-signer.

If someone is willing to help you, this could be a great way to build your credit from scratch. Just know that if you are not responsible, and don’t make your payments on time, it will affect the credit of the person co-signing for you.

Remember, the best thing to do to build your credit from scratch, is to make all of your payments on time, each and every month. No matter what the payment may be for.

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