4 Ways to Build Your Credit
Your credit report is an important part of your financial health. If you’re trying to build your credit, there are some things you can do to boost your score. Here are four ways you can work to build your credit:
4 Ways to Establish Credit
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- Sign Up for a Credit Card via a Retailer
A credit card issued by a retail store may have less stringent requirements than major credit cards. Once you’re approved for a retail credit card, you can enjoy perks like discounts, free shipping or cash back on purchases. When you sign up for a retail credit card, be sure the issuer reports your credit line to the top credit bureaus, so it appears on your credit history.
- Get a Secured Credit Card
A secured credit card requires you to pay an initial fee which acts as the credit limit. A secured credit card is great for increasing your credit score because there is no risk of over-drafting the account.
- Become an Authorized User on an Existing Credit Card
Another way to build credit is by having an existing credit card holder name you as an authorized user. Becoming an authorized user allows you to make charges to a credit card in the same way as the primary card holder. This is a popular choice for parents who want their children to begin building their credit the right way. However, it is important to confirm with the creditor that they report authorized users to credit bureaus.
- Get Approved for an Installment Loan
Your credit score is made up of different factors, including having a variety of credit types. A popular credit type is an installment loan, such as a car loan. Paying back installment loans that have regularly scheduled payments lets creditors see you can pay back balances responsibly, increasing your credit score.