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If you don’t have a credit score, you can easily begin to build strong credit.

Even if you don’t need to borrow money right now, remember that building good credit is the key to getting approved for mortgages and auto loans with low interest rates. By building credit now, you put yourself in a good position if you want to buy a car or home in the future.

Ways to build a credit score

One of the easiest ways to start building credit is to apply for a credit card.

If you have a relationship with a bank, they may be able to recommend a credit card for you. Credit cards with low limits are easier to qualify for, and also make it easier for you to build good credit habits.

Once you get a card, put small charges on it that you can pay off in full every month. This will start adding points to your credit score.

If you have trouble getting a credit card because of your lack of credit, there are other options for you.

A secured credit card is easier to obtain. They’re usually linked to a savings account and limited by the amount in the linked account. However, not all lenders report secured credit cards to the credit reporting agencies, so make sure to ask your lender if they do.

Another way to build credit from scratch is to become an authorized user on someone else’s account, or open a joint account with someone with a good credit history.

Keep in mind that on a joint account, just as good behavior affects both of you, bad behavior affects both of you.

You can also begin to build credit through loans.

Making on-time payments on student loans, auto loans, or secured loans are all great ways to build credit. Auto loans are some of the easiest loans to obtain, but be aware of the interest rate and terms—they can be high for borrowers with no credit.

You can also borrow money from non-profit lending circles. Organizations like the Mission Asset Fund are growing in popularity, and provide an affordable option for borrowers who need to build a positive credit history.

There are plenty of easy ways to start building credit. All you have to do is start!

If you are interested in talking more about how to use or build your credit for property financing, please contact me here.