Starting Your Credit History from Scratch

Establishing credit when you have no credit history is easy and there are several ways to get started:

1. Apply for a secured credit card: A secured credit card is a type of credit card that requires a security deposit as collateral. This deposit serves as a guarantee for the lender, which makes it easier to qualify for the card. By using a secured credit card responsibly, you can build a positive credit history and eventually qualify for an unsecured credit card.

2. Become an authorized user: If you have a friend or family member who has a credit card with a good payment history, you can ask to become an authorized user on their account. This means you can use their credit card to make purchases, and their payment history will be reflected on your credit report.

3. Apply for a credit-builder loan: Some Credit Unions and other banks offer credit-builder loans that are specifically designed to help people build credit. With these loans, you make payments into a savings account, and the lender reports your payment history to the credit bureaus.

4. Apply for a retail credit card: Retail credit cards, such as those offered by department stores or gas stations, are typically easier to qualify for than other types of credit cards. By using a retail credit card responsibly, you can establish a positive credit history.

5. Pay your bills on time: Even if your regular bills, such as rent or utilities, are not reported to the credit bureaus, it's important to pay them on time. Late payments can have a negative impact on your credit score.

Building credit takes time and requires responsible credit management. By starting with these steps, you can establish a positive credit history and qualify for better credit products in the future.