Start Building Your Credit

Some people, including those in young adulthood, prefer to avoid the subject of credit altogether because it seems too complicated for them and they don’t think it’s worth much attention. But the truth is that it should not be postponed. If you’ve never had a credit card or a loan, your credit history is blank, which means there’s no record anywhere that attests to your ability to responsibly manage credit. This may affect you when applying for credit in the future, both for a card or personal loan, and for when you want to buy a car or a home. You can start to generate credit in these ways:

1. Open a deposit account. If you want to obtain a loan or a credit card in the future, you should start by opening a bank account. Although this won’t necessarily help you build credit, having a good relationship with a financial institution could help you get a loan in the future, or even your first credit card. Check the available options and the requirements that you must meet when opening an account at popular.com/en/accounts/

2. Apply fora credit card or a loan with collateral. There are credit cards designed to help you build a credit history. Similarly, a loan with collateral can contribute to this purpose. Once you’ve obtained one of these two options, it’s very important that you always make payments on time. For both products, you may need a qualified co-signer. That person will also be responsible for what you request. To apply for a loan at Banco Popular you must be a resident of Puerto Rico and be 21 years of age or older. If you are under 21, you must present an emancipation or marriage certificate. Other requirements may apply depending on the product you are interested in.

3. Use your credit card judiciously. To establish good credit, try to use the card in moderation. Use it to pay for only what you can pay off each month. It’s advisable not to use all the available credit, as that will show that you manage your debts responsibly—and that, in turn, will improve your credit rating.

4. Order credit reports. There are agencies from which you can order reports of your credit history. The three national companies are Equifax, Experian and TransUnion. After using your credit for six months, check your rating. Review the positive and negative aspects so you can correct anything you’re doing wrong.

5. Find other credit products. There are other products that can help you generate a credit history with the support of a qualified co-signer.  Our bank officers are ready to assist you.

The process of generating credit takes time. You have to be responsible with your financial decisions and have patience, because the best way to build your credit is little by little. This will help you generate a solid history without becoming over-committed with high-dollar loans or too many credit cards. Remember, the way you manage your credit today is the basis of what your financial life will be. Want more tips for a healthy financial future? Click here to watch a video on these strategies. For more information about credit, go to Banking 101 for advice that will help you achieve your financial independence. The content of this material is provided for informational and educational purposes only and may not be applicable in all situations. Its content should not be construed as advice of any kind or as a suggestion to take (or inhibit) any particular action. The information and overviews included are designed to help you understand some of the factors that you should generally consider when evaluating the relevance of any financial strategy. It does not include or take into account all factors that may be relevant to your individual financial needs. By providing this information, we assume that you are able to evaluate this information and exercise your independent judgment.