Establishing Good Credit

If you don't have a credit history because you've never had a credit card or loan in your own name, you might find it hard to arrange for credit. While that can be frustrating, there are simple ways you can begin to establish your credit history.

A retail store card or gasoline card might be easier to obtain than a typical bank credit card. You're limited in where you can use these cards to make purchases, but if you pay your bills on time, you'll begin to build a positive credit history. Be sure to ask if the card company reports to the credit bureaus, as not all of them do.

A secured card

A secured credit card is one that's attached to a savings account. You deposit a certain amount into that account, which is then pledged to the bank that is issuing your secured credit card. You can't access the cash, but you can spend up to that amount using your secured card. If you pay your bills responsibly and on time, you should eventually qualify for a regular credit card. The deposit account is in your name, but if you don't pay your bills, the credit card issuer can claim the money in the account to cover what you owe.

If you're having trouble getting credit, don't apply for too many credit cards, even if you think you'll eventually find one that approves you. Each time a potential lender views your report is considered an inquiry, and the number of inquiries made is listed on your credit report. If you have a lot of inquiries, it can have a negative effect on your credit score. Inquiries initiated by a third party in response to your request for credit or financial services will be counted as inquiries. Your own requests to review your credit report or inquiries for promotional offers, such as a pre-approved credit card, will appear on the report, but these inquiries do not affect your credit score.