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How to Build Good Credit


As you begin to build your credit history, it is important to remember that how you manage credit today will impact your life in many ways for years to come.  Your credit history will determine whether you will get a student loan, a car loan, or are able to rent an apartment or buy a home – and will determine the interest rates and fees you will be charged for the loan.  It may even determine if you get the job of your dreams.

It’s easy to begin building good credit.  Consider:

  1. Opening a checking or savings account, or both.  While these accounts are not directly reflected in your credit report or FICO score, other possible creditors may use these to verify you have money and know how to manage it.
  2. Applying for department store and gasoline cards as these types of cards are usually easier to qualify for than major bank credit cards such as Visa or MasterCard.  Remember to manage these cards responsibly as repaying credit card bills on time is important in maintaining a positive credit history.
  3. Taking out a personal loan from your local bank or credit union and paying the money back over a year or two. Before you do this, however, ask the lending institution if they will report your repaying of this loan to credit bureaus.  If they do not report to credit bureaus, this loan will not be reflected on your credit report or in your FICO score.
  4. Asking a financially responsible family member or friend to co-sign on a credit card or loan application with you.  Adding a co-signer to your application may help you qualify for a loan or credit card you may not qualify for on your own, and while you are both jointly liable for the debt, you will both have the debt reported to the credit bureaus, and included on your credit report.
  5. Log onto www.annualcreditreport.com or call 877.322.8228 to get a free copy of your credit report each year. Contact the credit bureau if you discover any incorrect information. 

Equifax- www.equifax.com
     (800) 685-1111

Experian (formerly TRW)- www.experian.com
     (888) 397-3742

Trans Union- www.transunion.com
     (800) 916-8800