Individuals can build credit by putting utilities in their name and paying the bills on time. Other ways include obtaining a credit card and maintaining a low balance that is paid in full, or by applying for a small personal loan at a bank or credit union, suggests Forbes.
Secured credit cards allow those with bad credit to reestablish their financial bearing by placing a predetermined amount of money up for collateral in exchange for a line of credit, states Bankrate. Although the balance eventually is paid, on-time payments favor higher than payments reported as delinquent. The latter reduces credit scores as well as using the entire line of credit at once.