You may be able to build credit just by paying your bills. It’s also worth mentioning that most major credit card issuers don’t allow co-signers. Keep in mind that any late payments or negative actions could affect the co-signer’s credit as well as your own-just as they might if you were an authorized user. The biggest difference, however, is that you are both responsible for making payments. Much like becoming an authorized user, setting up a joint account or getting a co-signer on an account could also give you access to credit. Set up a joint account or get a loan with a co-signer And once the loan is paid off, borrowers get access to the money in the savings account. Because the lender reports payments to the credit bureaus, credit-builder loans can help establish credit. And over a fixed period, the borrower pays it back with relatively small payments. The lender deposits the loan amount into a locked savings account. These are small loans-anywhere from $300 to $1,000-designed to help build credit history. Take out a credit-builder loanĬredit unions and community banks may offer credit-builder loans. ![]() But negative actions, like missed payments, could affect both the primary cardholder’s and the authorized user’s credit. If the card issuer reports authorized users’ activity to the credit bureaus, authorized users may be able to benefit from the primary cardholder’s credit history. Some issuers, like Capital One, may also provide a separate card and online access for eligible authorized users. With access as an authorized user, you’re allowed to make purchases but the primary cardholder remains responsible for payments. If a friend or family member trusts you and is willing, they could make you an authorized user on their credit card account. The process may even involve returning your deposit. When you’re ready, some credit card companies may allow you to graduate to a traditional card without closing your original line of credit. That means doing things like making at least the minimum payment on time each month and using your card responsibly. If you choose a secured card that reports to at least one of the three major credit bureaus, you can use it to help build a successful track record. With a secured card, you make an initial security deposit that’s held by the credit card issuer while the account is open. There’s another option called a secured credit card. But without a credit history, it can be difficult to get an unsecured credit card. One way to establish credit is to apply for a credit card. Ready to establish a credit history? Here are five tips that can help you get started. But however you do it, you’ll want to use credit responsibly, which includes keeping spending within your means and paying bills on time. You might even be able to do it without a credit card. There are many ways to start building credit. And if lenders can’t see a credit score, they might not be willing to extend you credit. If you have no credit history or thin credit, it’s difficult for credit-scoring companies to generate a credit score for you. Lenders use your credit scores to estimate how likely you are to repay your debts on time. So you might see slight differences in your scores. Keep in mind that there are multiple credit-scoring models and credit scores. To calculate your credit scores, a credit-scoring company like FICO or VantageScore applies a mathematical formula or model to the information in your credit reports. When credit bureaus receive that information, they add it to your credit reports. It includes information about your loans and credit card accounts that have been collected by the three major credit bureaus-Experian®, Equifax® and TransUnion®. Your credit history is the record of how you handle your money and debt.
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