Woman sitting at computer with credit card.

Good credit is so beneficial to your financial success, a quick Google search on the topic will return more than three million results. But most of these results focus on how to increase your score. How do you build credit when you’re first starting out? If you don’t have credit history, it’s hard to get a loan, a credit card or even rent an apartment.

To tackle this catch-22, I sat down with TTCU Credit Card Operations Director, Ashley R. With 25 years’ experience in the financial industry, Ashley knows a thing or two about credit.

According to Ashley, when trying to build credit, you have several options, depending on your circumstances. Someone trying to build credit for the first time can:

1. Become an authorized user on an existing account.

A family member or significant other can add you as an authorized user to their existing account. Some caveats though –

  • The existing card holder should have good credit. It doesn’t work if they make late payments or are behind in payments.
  • Recognize that as an authorized user, you become responsible for any outstanding debt.

2. Get a secured credit card.

A secured loan means there is collateral involved. Put simply, collateral is an item of value that you pledge to the lender in exchange for a loan. This could be a car, a boat or in some cases, a savings account.

3. Get a student loan.

If you plan to attend college or a trade school and you need financial aid, federal student loans could be a solution. Unlike private student loans, most federal student loans don’t require a credit check.

Ashley emphasized that when trying to build credit, your payment history is vital.

1. Always pay on time.

A late payment can be detrimental to your goal of good credit.

2. Make payments for 12-24 months.

On-time payments are important but so is establishing a long history of payments. If you pay off a loan in six months, you’ve established credit but no history. And future lenders will look at both.

Are you ready to start building your credit? Start here with our credit building guide or stop by any of our nineteen locations and chat with a Credit Union Advisor today. Above all, we’re here to help!