How to Start Credit – 2 Proven Ways To Start Credit

By The CreditConsultant on January 22, 2011 In Finance

Just about everything these days requires credit. From obtaining a credit card to getting a cell phone provider, a good credit history is needed. Even purchasing a house or car with a bank loan requires good credit. Perhaps you are young and just starting out financially. Or, maybe you have just never utilized credit. Either way, you might be wondering how to start credit with good habits to keep your record on track.

The first step in how to start credit is to apply for a small store retail card or loan with a co-signer. Generally, you will want this person to have good credit as the lender is using their previous record as collateral to extend financial help to you. If you default on the loan or fail to pay your bill, this affects the record of your co-signer.

If a co-signer is not available, a secured card may be a way for you to start. In this case, a lending company requires a lump sum deposit payment up front in exchange for a credit limit of the same amount. For example, a $500 payment for a secured card will most likely give you a $500 card limit. If you fail to pay your card bill, the lender will take the fee out of the secured amount and negatively report this to the bureaus. If you continually pay your bill on time for a few years, several lenders will even reimburse the secured amount.

The easiest way to start credit off on a good foot is to pay on time every month. By creating a good habit in this now, you will build up positive history in your report. This allows for a higher score and further opportunities for loans in the future. Now that you are empowered with new information, go out there and build credit.

Mark Clayborne is a Certified Credit Consultant with ten years of experience assisting consumers with credit issues. For more powerful secrets on credit repair, debt settlement, stopping collectors, rebuilding your credit, and raising your score, please read the first chapter of The Credit Repair EBook for Free and get a Free Restore your Credit E-class at