Money 101: How to Build Your Credit

How to Build Your CreditBad credit and no credit – two things that can harm your chances of getting a loan for a car or a home. Having less than ideal credit can also affect other aspects of your life, including having the utilities connected or getting a job. Some employers check your credit score before hiring you.

Establishing a good credit history starts by making the right choices and managing your credit properly. Use these suggestions from Always Money to get started building your credit.

3 Ways to Build Your Credit

1. Get an installment loan.

An installment loan is a type of loan where you borrow a set amount of money and make scheduled payments over time. For instance, if you borrow $1,000, then you’ll pay the amount back in 24 months at a specified interest rate. If you take out a loan, make sure that you only borrow what you know you can realistically pay back on time. Making the payments on time benefits your credit score, just as missing a payment can negatively affect your score.

2. Get a credit card.

A credit card has positive aspects. For one, it can help you build credit by purchasing items and making payments each month. Unfortunately, some people go over their credit limit, fail to make the minimum monthly payment and max out their cards, all of which lead to lower credit scores. Use your card to make small purchases; don’t let the balance get out of hand and pay at least the minimum monthly payment to build and manage your credit.

3. Get financing at a retailer.

Some retailers offer financing for those who have no credit or less-than-perfect credit. You may have even seen store ads that read “No credit refused.” This type of financing helps you secure an item with little or no money down and make payments on it each month. Just like an installment loan or a credit card, you’ll have to make the monthly payments to build your credit score. Of course, you may end up paying more in the long run due to high interest rates.

Once you have credit, it’s vital to manage it well. Even one missed payment can alter your credit score and damage both your payment and credit history. Find an Always Money location near you to start building your credit today. Whether you borrow a loan or obtain a credit card, paying on time helps you to establish a good credit rating and get loans in the future with little or no interest rates.


  1. […] 1) Catch up on old bills. Having bills in collections is one the worst things for your credit. Dig yourself out of a rut and get more breathing room in your budget by using your refund check to take care of unpaid or past due bills. Not only will it help you clear up your credit, but it can also boost your eligibility to get approved for new cash loans in the future. [Read: How to Build Your Credit] […]


  2. […] Clean Up Your Credit. Obtain a free copy of your credit report and check for any errors. If there are, you can write to the credit bureaus and ask for a correction. A number of other factors play into having a bad credit score including using more than 30% of your available credit, not paying your bills on time, and taking out too many loans at once. Increasing your credit score may take some time, but by practicing the tips above, you’ll be well on your way. [Read more: How to Build Your Credit] […]


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