Credit is a topic we often avoid because it seems complicated and not worthy of our attention in this stage of our lives. But the truth is we can’t ignore it. If you haven’t owned a credit card or received a bank loan, you don’t have a credit history. So, there’s no proof that you can manage credit responsibly. This could eventually turn into a problem. That’s why you should pay attention to these tips for building your credit.
- Open a bank account: To apply for loans or credit cards, you should start by opening a bank account. This account is not required, but it does help your credit score.
- Apply for a guaranteed credit card or an insured loan: Once you have applied to one of these options, it’s crucial you always make your payments on time. If you decide to apply for a loan, get a qualified co-signer, such as a parent or legal representative. This person you choose will also be responsible for the loan you apply for.
- Use your credit card very carefully: To establish a good credit score, try using your credit card only moderately. Use it to pay only things that you can afford monthly. Don’t use all the available credit. This way you show that you can manage your debt responsibly, thus improving your credit score.
- Order credit reports: There are credit agencies from which you can order credit reports, such as Equifax, Experian, and TransUnion. After using your credit for six months, check your credit history. Evaluate the positive and negative aspects and correct whatever needs improving.
- Other credit products: There are also other products that can help you build credit, such as Starting Connection from Popular Auto®, which lets you apply for a car loan with the help of a qualified co-signer. Another option is Credi-Ahorro, which lets you place the money from an approved loan in a certificate of deposit that you’ll pay over the term you choose. Once you finish paying your loan, the bank will give you the money from your certificate plus the accumulated interest.
Building credit takes time. You need to be responsible with your financial decisions and be patient. Don’t forget that slow and steady is the best way to build credit. This will let you build a solid credit score without compromising yourself too much with big loans or too many credit cards. For more tips about your financial future, visit popular.com/tips-for-beginners.