How to Build a Credit History From the Ground Up

If you have no credit history, because you've never had to take out a loan or open a credit card, you might think that's better than having bad credit. However, if you'll ever need to get a mortgage for a home, or buy a car that's more expensive than your savings account, no credit can actually hurt you.

The team at AutoCenters St. Charles put together 3 great ways to establish good credit with little risk, and without getting over your head in debt.

Look for a Loan Co-Signer

How it can build good credit

Having a co-signer who has good credit, when you have no or bad credit, means you'll qualify for a lot more financing options for a lease or loan. Make payments on the loan that you take out, and boom--you're building a good credit history.

How it can be a good fit for you

This could be right for you if you're in need of a car loan near St. Louis, but you don't have the credit to back it up or enough cash for a big down-payment. Remember, though, if you can't afford to make payments, your co-signer is legally obligated to cover you, so be sure that you talk it over with a partner or family member before you dive in.

Get a Secured Credit Card

How it can build good credit

A secured credit card counts as an open account, counts as part of your credit line, and every on-time payment counts as a positive step toward a solid credit history. It's one of the safer ways to build credit with a card because it comes with safeguards.

How it can be a good fit for you

A secured card could be good for you if you want to start getting some practice having and using a card without the temptation of going overboard. The way it works is that you put down a deposit (usually $500 or so) that acts as a safeguard--you can use the card like any other, and pay off what you put on it. Here's the catch: typically, you can't spend more than you put down as a deposit (that's your credit limit) so you always have money available to make the payment.

Take Out a Credit Builder Loan

How it can build good credit

It's right in the title--this is a loan specifically to help build credit. You borrow an amount of money that's kept safely in an account, and then you make payments on that amount, and build a positive history.

How it can be a good fit for you

This is a great fit for people who want to build credit and build savings at the same time. You'll still pay interest on the money you borrow, but instead of getting money upfront, you'll essentially be making "deposit" payments on an amount of money that you'll receive at the end of your term. Visit us today and we'll help you approved for no credit or bad credit auto financing.


Dan Jennings

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