How to Build Up Credit

Obtain a secured credit card. You will put money on deposit that serves as collateral against any card purchases. Be sure to check with the card provider, however, to be sure that your payment history will be reported on your credit report.

Get a co-signer so you can “piggyback” on their credit. To get started, lenders will consider the co-singer’s existing credit, who is essentially vouching for you, in awarding credit. But this can be risky, as any mistakes you make directly impact the co-signer as well.

Get a retail or gas card. Often a gas card or store charge card are a bit easier to obtain and the potential to do serious damage is more controlled. But if used responsibly, they are both great ways to quickly build a good credit history.

Open a checking and savings account. While account activity is usually not reported on your credit history, lenders will often ask about the existence of such accounts on credit applications, which will ultimately count in your favor.

Utilities and cell phones. Paying these bills on time and in full every month is another way to quickly establish a good record of trustworthiness and fiscal responsibility.

Consider taking out a small loan. A small personal loan from a bank or credit union can be a huge help in establishing credit. While you may be required to put up collateral of some kind, it will be well worth it in the long run in building up your credit.

Pay on time and as directed. Regardless of what kind of credit you obtain, be sure to make your payments on time and as directed. This means getting your payment into the mail (or doing an electronic payment) 3-5 days before the actual due date to give your payment time to arrive and be processed. And be sure to pay your bill in full.

Obtain a copy of your credit report. Especially if you are building up credit after having made some mistakes in the past, this is particularly important if you find yourself having to rebuild your credit. You will want to review your credit report (which can obtain for free at annualcreditreport.com) both to see the existing debts you need to satisfy as well as to see if there are any errors that need to be corrected.