If you don’t have a credit score, you can easily begin to build strong credit. For a detailed understanding of how credit scores work, check out this comprehensive guide by the Consumer Financial Protection Bureau. Building good credit is key to getting approved for mortgages and auto loans with low-interest rates. By building credit now, you position yourself well for future purchases.
Starting your credit journey
Credit cards as a starting point
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 recommend a credit card for you. Credit cards with low limits are easier to qualify for and help build good credit habits.
Using secured credit cards effectively
A secured credit card is easier to obtain. They’re usually linked to a savings account and limited by the account’s amount. Ensure your lender reports to credit agencies for it to impact your score.
Alternative credit building strategies
Becoming an authorized user
Another way to build strong credit from scratch is to become an authorized user on someone else’s account or open a joint account with someone with good credit. Remember, both good and bad behaviors affect both parties.
Loans as a credit building tool
Making on-time payments on student loans, auto loans, or secured loans are great ways to build credit. Auto loans are some of the easiest loans to obtain, but be aware of their terms.
Non-profit lending circles
Non-profit lending circles like the Mission Asset Fund provide an affordable option for borrowers needing to build a positive credit history.
Ready to take the next step in your credit journey?
Building a strong credit score is just the beginning. Whether you’re planning to buy a home, finance a car, or simply want to manage your finances better, we’re here to help. Visit our main page for more information on how we can assist you in achieving your financial goals.
Faced a residential loan turn down?
Don’t let a residential loan turn down discourage you. We specialize in finding solutions where others can’t. Learn more about how we can help on our Residential Turn Down page. Let’s turn that ‘no’ into a ‘yes’!
FAQs on Credit scores and building strong credit
What if I don’t have a credit score and need to borrow money?
Start by building your credit through secured credit cards, becoming an authorized user, or taking small loans. Consistent, responsible financial behavior gradually builds your credit score.
Can joint accounts help build my credit score?
Yes, joint accounts can help, but it’s important to maintain positive financial habits as actions by either party affect both credit scores.
