Fitzsimons Credit Union

rss

Fitzsimons Credit Union blog


Building a Credit Score From Scratch

 Building a Credit Score From Scratch

Young adults starting out on their own, recent immigrants, or others who just haven’t had a chance to build up their credit, often bump into a cold fact of financial life: Having no credit history can limit your options just as much as having bad credit does. Lenders, rental offices, and insurance companies use your financial track record to judge how likely you are to pay debts and bills — and if you're a blank slate, you're generally considered a risk.

Fortunately, there are some simple steps you can take to quickly establish your credit record target.

Start with a credit card

 

One of the quickest ways to develop a positive credit history is with a credit card, which lets you show that you handle small amounts of debt responsibly month after month. Even if you can't qualify for a card on your own, there are ways to take advantage of this credit-building tool:

  • Recruit a co-signer. You might be able to get a card if someone with good credit — such as a parent — is willing to co-sign the application with you. You and your co-signer will be equally responsible for the charges you make, along with any late-payment fees or other penalties if you don't make payments on time. Also, late or missed payments can damage your credit score and your co-signer's, too. But every time you make a payment on time, it will shore up your credit history.
  • Become an authorized user. Another option is to ask a family member or significant other to add you to their credit account. First, though, make sure their bank or credit union reports activity by authorized users to the major credit bureaus — otherwise, this won't help your credit score. And remember that here, too, your activity with the card can affect someone other than yourself.

Next steps

Once you have a card, your behavior with it will determine how high, and quickly, your credit score rises. To keep moving in the right direction:

  • Make on-time payments. The most common credit-scoring model is the FICO score, and it is based on a combination of factors. The biggest, making up 35% of your score, is your payment history. Pay all of your bills (not just your credit card) on time to keep your score rising.
  • Keep balances low. Try not to use your card up to or near your credit limit; it looks bad to creditors if your cards are maxed out. A good rule of thumb is to keep your balances at or below 30% of your total credit limit.
  • Don't over-apply for cards. According to a recent NerdWallet study that included an analysis of millennials' credit scores, many young adults are applying for the wrong credit cards and getting rejected — and that's hurting their credit, since excessive inquiries can make someone look like a bad credit risk. Apply only for cards you really want, and space out those applications.
  • Check your credit reports. You have the right to get a copy of your credit report from each of the three major reporting agencies — ExperianEquifax and TransUnion — once a year for free. Review yours and report any errors that might hurt your score.

 

It can be easier to build up good credit if you have a professional helping you. Consider consulting with a financial institution to help figure out the best way to establish credit and make other important financial decisions.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

 




Comments are closed.


Tags

equity mortgage skimming telephone scam 104EZ 1st home 1st Mortgage 2nd Mortgage a partnering credit union accounts anniversary anschutz ANSCHUTZ CAMPUS anschutz campus credit union anschutz credit union anschutz credit unions anschutz financial institution apps ATM atown AURORA aurora community Aurora Credit Union aurora credit unions auto auto loan auto loans AUTO PROMO auto promotions auto purchasing AUTO REFINANCE black friday borrow budget budgeting budgets building credit building teen credit business accounts buying a house buying a new car buying an old car calls car buying CAR DEALS car financing car refinance CARBUYING carbuying for teens Cardvalet cars CARS IN AURORA cars to fit your family checking Children savings accounts childrens hospital Childrens Hospital Colorado childrens miracle network childrenshospital CHRISTMAS MONEY christmas presents cmn college college affordability Colorado Comitis Crisis Center Community community credit union Community Involvement Aurora conserve credit credit building credit card credit history credit report credit score credit union Credit Union Leaders credit union strong Credit Unions for Kids credit unions in aurora CUNA cutting costs cybersecurity data breaches debt debt-payoff Denver Area Credit Union deposit diy do it yourself Dreams Thrive Here drive-in education Emergency Funds equifax Executive Team experien extra income Extrasbenefits Fin Lit finance a business finances financial education financial fit financial goals financial literacy Financial Literacy Classes financial mistakes financial planning Financial resources for parents FINANCIAL STABILITY financing your vacation finding the right car for you Fitzsimons fitzsimons army hospital FITZSIMONS CREDIT UNION Fitzsimons Credit Union CEO fraud free credit report free tax help getting ready to move gift cards Giving Back goals Grocery Cart Races h&r block h&rblock heloc Helping the homeless hispanic outreach historic aurora history holiday accounts holiday budget HOLIDAY LOAN HOLIDAY SAVINGS holiday shopping' holidays home home buyer Home buying home improvements home investing Home Loans home selling homebuying homebuying mistakes housing how to prepare house to be sold how to save money on auto loans identity identity theft ilovemycreditunion income tax income tax return insurance interest rates Internal revenue service International credit union day invest IRS Juntos Avanzamos Juntoz Avanzamos Keller William:5280 Home Team kellerwilliams lastpass leasing a car library LikeABankButBetter line of creditt loan loans LOCAL Making a Difference making your money work for you member appreciation event. member benefits Millennials house mobile app mobile deposit money mortgage Mortgage Loan mortgage refinance moving my tax return national credit union month Nerdwallet new car new home new vs. old car NEW YEARS FINANCIAL RESOLOUTION new years resolution new years resolutioons online online learning and fun online safety Partnering Credit Union phone photo deposit ProtectMyID rainy day fun read realtor advice red rocks REFINANCE representative retirement safety SandraNeves save SAVE FOR THE HOLIDAYS saving Saving for a vacation SAVING HABITS saving money SAVINGS savings for children savvy saver accounts scam Scholarship scholarship grants school security security breaches selling your home selling your house senator Small Business small business loans small houses smart savings smartphone southlands Southlands credit union spanish speaking stanley marketplace starting a business stolen identity student loans SUMMER SUMMER DEALS summer vacation taming the debt dragon TAX HELP tax prep software Tax refund Tax return tax season tax tips Taxes teachable moments teaching children about money teen accounts teen debit cards teen scholarships thanksgiving thanksgiving dinner This Is Aurora TOGETHER WE ADVANCE TURBOTAX university used car used car loans Vacation vacation savings vacation tips VEHICLE REFINANCE Von Willebrand Disease VP of Finance wealth winter is coming WITHHOLDINGS Youth youth month youth savings accounts

Federally insured by NCUA |  Equal Opportunity Lender  |  © 2019 Fitzsimons Credit Union  |  303-340-3343  |  1-800-933-5839

Fitzsimons Credit Union recognizes the importance of ensuring our website is accessible to all users. We are in the process of redesigning our site in accordance with the requirements of the Americans with Disabilities Act (ADA) and will be publishing updates to the website within the next several months so that our content is readable via non-graphical, text-only browsers. We appreciate your patience during this process.

FitzsimonsCU.com links to third party websites that may not be controlled or owned by Fitzsimons Credit Union. Fitzsimons Credit Union may not be responsible for the content of the alternate web site neither does it represent either the third party nor the member if the two enter into a transaction. Fitzsimons Credit Union does not represent either the third party or member if a transaction is entered. Privacy and security policies may differ from those practiced by FitzsimonsCU.com.

NMLS #459085
     
Shared Branch Logo  CO-OP ATM Logo Centennial Logo
 

 

  
 

AFF NCUA LogoEqual Housing Logo      

Please Note:

You are now leaving the Fitzsimons Credit Union website. We are not responsible for
the privacy practices of any other web site. We encourage you to read the privacy policies
of any web site you access, especially if individual identifying information is being collected.

Fitzsimons Credit Union does not represent either the third party or member if a transaction is entered.

Continue Cancel

Don't ask again