Building Credit

Building credit is a long-term process; don’t get discouraged if you have a way to go, it can take time! Here are three things you can start doing today to help build your credit:

• Pay your bills on-time, every time
• Don’t get too close to your credit limit. Aim for using no more than 30% of your available credit
• Ensure your Credit Report is correct and dispute any inaccuracies

Secured Credit Card

A Secured Credit Card is applied for just like any other credit card. It requires a cash deposit that is used as collateral for the account and also becomes the credit limit for the card. The card holder uses the Secured Credit Card just like a regular credit card, making purchases and paying off the balance each month. Often after a period of successful use, the card holder can request a switch to a regular credit card at which time the original cash deposit would be returned.

Credit Builder Loans

Usually found at Credit Unions, a small loan is deposited into a locked savings account. Each month you pay the loan back with a small payment, usually with a 6 – 24 month term. The Financial Institution reports the payments monthly to the reporting agencies. At the end of the loan term you receive the accumulated money back. This product has the dual benefit of building credit and accumulating savings.