The Best Way to Build Credit

Without a credit score, it can be difficult to apply for loans, rent an apartment, or buy a house, but how do you get a credit score, and what’s the best way to build credit? There’s no easy answer, but we have some guidelines for how to build credit and an answer to that nagging question: how long does it take to build credit.

If you’re starting from scratch, it can seem like an impossible mission — how can I build credit if I need a credit score to get it? Well, as a matter of fact, there are several ways you can go about building your credit score from the ground up, and we at Public Service Credit Union are happy to help you figure out the best ways to build credit. Here are a few methods to get you started.

How to Build Credit from Nothing

While traditional loans and credit cards can be difficult to obtain if you haven’t established credit, there are still a couple of avenues you can take that are specifically designed to help you do just that:

  • Apply for a Secured Credit Card: Unlike standard credit cards, these cards are backed by a cash payment you make up front — usually as much as your credit limit — so that there’s solid value to be used as collateral if you miss a payment. Once you have one, you can use it just like a regular credit card.
  • Apply for a Credit-Builder Loan: As the name suggests, this loan is designed to help you build credit, and works by holding the money borrowed in an account until the loan is repaid. It functions a bit like a savings program, but one that reports your good efforts to the credit bureaus.

How to Keep Building Credit

Now that you have the tools you need to get started, how do you go about building and maintaining a healthy credit score?

  • Use Your Credit Card: You need to use some of the credit available to you to establish a credit history. Just make sure that you’re able to pay back whatever you charge to it. Ideally, you would keep your balance below 30% of your total credit limit.
  • Make Your Monthly Payments On Time: This is another aspect that has a major effect on your credit score. When you regularly make your payments, you’ll gradually establish a history as a reliable borrower.
  • Time: It takes a history of good borrowing behavior to really start being reflected in your credit score, which can make it seem impossible sometimes. But you can’t build a credit history without getting started — and once your credit score does start to reflect your actions, you’ll be glad you did.

How Long Does it Take to Build Credit?

We’ve already said that it takes a history of good borrowing behavior to really start building up your credit rating, but how quickly can you see results? While a black mark can stay on your credit rating for as long as 7 years, it only takes 6 months of continued payments and smart financial behavior for credit bureaus to take notice. That’s on the high end as well; some bureaus will start recording your credit behavior in as little as 3 months.

Start Building Your Credit with Public Service Credit Union

Hopefully this guide gives you some insight into the best way to build credit. If you want to apply for a credit card, explore your loan options, or talk about other ways to help build and improve your credit, come to Public Service Credit Union. We have several branches in the greater Detroit area, and our experienced, friendly staff is ready and waiting to help you get on the road to good credit.

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