Consumers can establish credit by opening bank accounts, keeping bills paid on time and opening a prepaid, secured or store credit card, according to Wells Fargo. Secured or prepaid cards are easier to open, and they report payments regularly to credit agencies.
- Open bank accounts
- Keep up bill payments
- Apply for secured credit
- Keep a low balance
Start by establishing a checking and savings account. Credit card companies often require a bank account for applications. When consumers keep accounts open for a long time, it shows creditors that the consumer is able to handle the responsibility of an account. This in turn improves chances of getting credit.
Pay all bills on time, especially utilities and any credit or payment plan expenses. Missed or late payments on these bills get reported negatively to credit agencies. Sometimes, these accounts may even be reported positively if payments are consistent.
Open up a secured or prepaid credit card. These cards require an advance payment to secure the line of credit on the card. Payments on these are reported to credit agencies, helping to establish a credit history.
Avoid hitting the credit limit on any cards. Keeping the balance low compared to the available credit limit has a positive impact on credit history, according to Credit Karma.