A good credit score will affect your ability to borrow and also the interest rates that will be available to you. Generally speaking, a good credit score will result in a lower interest rate.

How to build credit history that benefits you:

  • Start early
  • The length of your credit history is a key factor in determining your credit score
  • Start small.
  • Lenders will assume you don’t plan to live within your means when you apply for a lot of credit in a short period of time
  • Open store charge card or credit cards to build credit
  • Pay your balance in full each month or keep your balance low. If you don’t qualify for a store charge card or credit card:
    • Open a secured credit card. It may allow you to use your money to establish a credit history. (For example, you contribute $300 to the card; your credit limit is $300.) Before opening a secured credit card, confirm your payment history will be reported to the major credit reporting agencies and consider fees, interest rates and the consequences of default1
    • Have someone cosign your account or installment loan
    • Ask a family member or friend about becoming an authorized user on one of their accounts. Credit activity on the shared account will be reported in the primary cardholder’s name and may be reported in the authorized user’s name. Use caution. Poor decisions may affect both you and the primary account holder, and vice versa
    • Don’t abuse the privilege
    • It’s easy to get in over your head. Make responsible decisions with your credit cards and loans
    • Pay bills on time
    • All unpaid bills, including credit card, medical, cell phone, etc., will appear on your credit report and negatively impact your score

To discover your credit score or for advice on how you can improve your credit, get in touch today.