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Extension > Live Healthy, Live Well > How to Build Credit

Wednesday, July 6, 2016

How to Build Credit

By Jose Lamas — Financial Capability Educator

Building your credit is an important step if you are interested in borrowing money for your first home or car. Your credit status will affect whether you get a loan and the amount of interest you will pay. Here are some tips for building or rebuilding credit.
  • Pay your bills on time, every time. You may want to set up reminders for due dates on a paper or phone calendar. Another option is to set up automatic payments with your bank, but you need to make sure you have enough money in your checking account for this method to work.
  • Don't get too close to your credit limit. Pay attention to the limit on your credit cards. You do not want to “max out,” exceeding the limit on your credit cards. Experts advise using no more than 30 percent of your credit limit, and some suggest using less if you can.
  • If you can’t qualify for a regular credit card, try a secured card. You can apply for a secured credit card from a local credit union or bank. Secured credit card issuers normally require a deposit, which would be your credit limit. Use the card and pay the balance every month to build good credit for the first time or to rebuild previously lost credit.
  • Don't apply for too much credit in a short time. Your credit score will suffer if you open several lines of credit at one time. Note that getting a new store card or transferring balances from other cards to a new card counts as opening a line of credit.
For more tips on building or rebuilding credit, visit the following websites:

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