4 Ways To Help Build Your Credit

When you don't have any credit or your credit is bad, it can be hard to get a loan to build your credit.  Here are four ways to help you build your credit.

Get a Payday Installment Loan

A payday loan office is a good place to build your credit. You can apply for a payday installment loan and make payments over time, which will help your credit. For each payment you make on time, your credit score will increase because your payment history accounts for 35% of your credit score. 

Payday loan companies, like EZ Money, can offer short and long term financing to people with bad and no credit because they charge a higher interest rate on their loans than standard banks do. They are earning more interest on their loans, so it offsets any losses they might have in their lending.

Most payday loan offices don't require you to have a job, as long as you have income. This can include income from self-employment, retirement, or any other type of income.

Apply for a Secured Credit Card

A secured credit card is not the same as a prepaid credit card, because a secured credit card can help build your credit. As you make on-time payments for your secured credit card, the credit card company will report this history to the credit bureau, strengthening and building your credit. 

With a secured credit card you can apply for an amount of usually $200 or more as long as you secure the line of available credit with a deposit of the same amount. This secured deposit gives the credit card a guaranteed payoff in case you don't pay on the card. 

Once you have a secured card, you can build your credit by charging purchases at places that take credit cards. Then, as you charge a little bit each month and pay it off the next month, your credit will improve.

Apply for a Loan with a Cosigner

If you need to build your credit, but don't have credit to begin with, a cosigner can be a solution for your problem. 

Having a cosigner with good credit apply on a loan with you will help you get a loan. But, if someone cosigns on a loan for you and you don't pay on the loan, the person who cosigned with you will be responsible for the debt. 

Friends and roommates may tell you no to cosigning with you, but a parent or a spouse is a better option to ask for a cosign favor. Parents and spouses will have more invested in you to be willing to share their credit with you. Remember they are taking a risk by loaning you their credit score to get a loan. 

If you do get someone to cosign on your loan with you, be diligent in paying on the loan because if you don't you will wreck their credit as well as yours.

Become a Credit Card Authorized User

There is another option to get some credit reported to your credit file. Ask a spouse, relative, or friend who has good credit if you can be added as an authorized user on their credit card. Although you won't be held responsible for paying on the debt, you can still build credit this way. 

Many credit card companies report credit history to credit files of authorized users on an account. Be sure to call the credit card company first to verify they do credit reporting on authorized users. It will be up to your spouse, relative, or friend who adds you as an authorized user if they give you a card to use on their account.

With these four options you can begin to build your credit and your credit score.

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