“How do I build my credit score?” is a question that we get asked all too often. Whether you’re looking to build credit for the first time, build your credit quickly, or fix your credit, there are a number of steps that you can take to get your score where it needs to be for the best financing terms.
The Ultimate Guide to Building Your Credit
May 1, 2017
NEW TO BUILDING CREDIT?
ADD A CREDIT MIX
Instead of applying for five secured credit cards, instead try to create a "credit mix" by applying for different types of credit. For example, have a car loan, home loan and credit card.
APPLY FOR A SECURED CREDIT CARD
If you have no credit score or credit history, you’re able to put down a cash deposit to get a line of credit started. In most cases, the amount that you put down for your cash deposit is equal to the card’s limit. After you close the account, you’ll get the deposit back.
APPLY FOR A CREDIT-BUILDER LOAN
When you take out a credit-builder loan, the money you borrow is deposited in a savings account where you cannot access until you have fully repaid the loan. Self-Lender is a low-cost way to get a credit-builder loan.
GET A CO-SIGNER
If you don’t have any credit, you often will have the ability to add a co-signer to an account in order to be approved.
BECOME AN AUTHORIZED USER
Some banks allow your family to add you as an authorized user on an account – you’ll still be building credit, but if the account becomes delinquent, you won’t be on the hook for the amount.
GET CREDIT FOR YOUR RENT
There are several rent-reporting services that take your rent bill and your payment history and report it to credit bureaus.
WANT TO MAINTAIN YOUR EXISTING CREDIT SCORE?
First things first: Make sure your existing credit score is accurate. Each of us has three credit reports – one from each of the three major credit bureaus: Experian, Equifax, and TransUnion – and approximately one out of five consumers has errors on at least one of them. You’re entitled to one free copy from each of those bureaus every year. Visit AnnualCreditReport.com to access these reports.
MAKE ON-TIME PAYMENTS
This doesn’t mean just your credit cards – also keep track of your car payments, utility bills and medical bills. If you don’t pay your bills, they will be sold to a collection agency, which will deduct points from your credit score. Sign up for autopay when you can, or set payment reminders for yourself.
KEEP ACCOUNTS OPEN
Unless there’s an annual fee on your unused cards, keep them open to show that you have a long length of credit history.
LIMIT YOUR APPLICATIONS FOR CREDIT
Just because you get a lot of credit card offers in the mail, doesn't mean you should apply for all of them at once. Apply for credit responsibly: when it makes financial sense, or when you're needing to build your credit.
Skills Fund is on a mission to provide all students with a transformative, outcomes-based education. Your career is important, and so is your financing. We want students to be knowledgeable about their credit health - because just as a bootcamp is the bridge to a new career, your credit score is the bridge to justified and fair financing.
We're committed to promoting educational access to as many students as possible. As long as you meet our basic underwriting criteria, you will most likely qualify for a Skills Fund loan. Our loan terms are fixed and transparent. You're able to see your monthly rate before even applying. To learn more about the value of a Skills Fund partnership, click here.