Establishing Credit

Build credit, not debt.

Getting Started

If you’re just starting out, you don’t have an existing credit reputation yet. Consider these options for establishing credit:

• Start with a secured credit card or loan from your local bank or credit union. Lenders require a deposit, usually up to the credit limit, that is held as collateral in the event you fail to pay your debt.
• Credit lenders will sometimes send unsolicited credit offers to bring on new customers. Consider low or no-fee options, but be sure to read the terms carefully.
• Become an authorized user on a loved one’s credit card. When someone adds you as an authorized user to their credit card, the account will appear on your credit report, along with all the account history. The biggest benefit of this approach comes from an account with a long history of spotless payments and a low balance. But for those factors to help you, the credit card issuer must report authorized-user activity to the credit bureaus, and your credit score must incorporate that activity in its calculations.
• Setup a joint credit account with someone you trust. A loan or credit card can be established with multiple account owners. As an account owner, you will be responsible for payments.