The United States of America

Establishing (or Re-Establishing) Credit.

If you’ve had credit problems in the past, or don’t have credit at all, it may feel very difficult to get started with establishing or re-establishing credit. The simplest way to do it is to acquire a low-balance credit card, use it, and make the payments on time every month. There are generally three ways that consumers can choose to establish or re-establish credit.

One option is to obtain a secured credit card. These are secured by a savings account with a balance equal to the credit line. Your bank or credit union likely offers this type of account as a credit-building tool.

Another option is to obtain a retail credit card. These are specifically for use at a particular retail store and can be easier to be approved for than a general purpose credit card such as a VISA or MasterCard. Often, interest rates and fees are quite a bit higher on these cards, so the best way to use them is to pay the balance in full each month as a tool to build (or rebuild) credit history.

Finally, some consumers decide to get a co-signer. These are people with an established credit history who commit to taking responsibility for your debt payments if you miss them.

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