What is credit and how do I build credit without a credit history? When you have a credit history, it proves that you are reliable when it comes to repaying borrowed money. The more credit you have, the easier it is to get loans, credit cards, and even lower insurance. But how do you build credit in the first place?
- Become an authorized user
Does a family member or significant other have a credit card? Ask if they can add you as an authorized user. When you’re an authorized user, that card’s payment history is added to your credit files, meaning when the card owner pays on time, that builds your credit. You don’t even need to have or use the card yourself! But be careful, don’t become an authorized user under someone with bad credit card habits. That damages both of your credit!
- Apply for a secured card
A secured credit card is a card that requires a cash deposit when you open the account. This deposit is usually the same amount as your credit limit. If you miss or are late to a payment, this deposit acts as a safeguard for your lender so they can reimburse themselves with the funds. Unlike debit cards, the activity on your secured credit card is reported to the major credit bureaus, meaning you can build your credit score by using one.
1166 FCU offers shared secured Visa cards to help you reach your credit goals.
- Get a student credit card
If you happen to be in school, there is good news! Student credit cards are generally easier to qualify for and they are made to cater to the needs of students. 1166 FCU offers student Visa chip cards, perfect for building your credit in a safe, easy way. This is a great way to start building your credit and learn positive credit habits.
Talk to the Credit experts
Have questions? We would love to answer them. 1166 FCU provides financial guidance for all of its members. Credit cards, loans, budgeting, etc. We offer the support you need to feel confident in making financial decisions.