Credit & Debt
Starting to build your credit? Get a head start by establishing good credit and keeping it there. Establishing credit may seem frustrating — you can’t get credit because you’ve never had any. Or you can’t rebuild your credit because you’ve had credit problems. Redwood Credit Union understands this and can help you!
Always paid cash or used checks to make purchases, and haven’t used credit? It may be a good idea to start! If you’ve had credit problems in the past, it’s important to re-establish your credit history.
Why is Credit Important?
- You may need good credit for PG&E, cable, and to get a cell phone.
- Good credit will help when buying a computer, a car, or even a new home.
- Getting a job may be easier. Potential employers can and do check your credit. A solid credit rating reflects positively on your ability to manage your job responsibly.
- Renting an apartment may be easier. A good credit rating tells landlords that you are a person whose more likely to pay the rent on time each month.
Here are five tips to help you start building your credit:
Open checking and savings accounts
It’s a basic step to get you going in the right direction. Having a checking and savings account will help you learn how to budget and save and it will help you build a financial relationship.
Establish a pattern of regular payments by putting your apartment and utilities in your own name and paying your bills on time.
Apply for a secured credit card
The Secured Visa Card allows you to spend up to the credit limit you establish by funding an account which is held as security for your credit card account. Look for a card with low or no annual fees and a low interest rate. A secured card is a great option for people who don’t have any credit history. This will help you build your credit rating so that you can get better rates when you purchase a car or a home (which means lower payments and savings in the long run!).
Make your payments on time
It’s the simplest and easiest way to build and maintain a good credit score. Pay at least the minimum payment on time every month. Redwood Credit Union allows you to set up automatic payments every month for your credit cards too.
Check your credit report
After you’ve opened up a checking or savings account and have been making monthly payments on your credit card, be sure to check the status of your credit score. It’s a good idea to check it at least once a year. To request your free report, visit www.annualcreditreport.com, or call 1(877) 322-8228.
