How to Establish Credit History in the USA

Having good credit is important, especially when you need a mortgage or a car loan. Your credit history also can affect what you pay for insurance, it can determine what offers you get from cell phone companies and other retailers, and it even can be used to determine whether you are offered a job. You don't start out with a credit history. You have to establish one, by gradually getting credit and using it wisely.

Instructions

1

Get and review your credit report from each of the three credit reporting bureaus: TransUnion, Experian and Equifax,. You can get free reports from www.annualcreditreport.com. Even if you have not established any credit, ask for your credit reports so you can be sure there has been no incorrect reporting on you.

2

Open a checking and savings account. Having bank accounts shows you have some financial stability.

3

Get a joint account credit card or get a cosigner on your own card. If you have a cosigner, you might be eligible for credit that you could not get on your own. However, any delinquencies on your--or the cosigner's--part hurts the credit rating of both of you.

4

Get a secured credit card, if you cannot get a regular credit card. With a secured card, you make a deposit, which may equal your credit limit. Be careful: Some secured card issuers charge excessively high interest rates,and exorbitant application and annual fees. Sites like Bankrate.com can help you compare issuers. If you belong to a credit union, see if it offers a secured card.

5

Apply for a regular credit card on your own. If you get one, you probably will have a very low credit limit. But if you continue to pay on time, the issuer will increase your credit limit.

6

Apply for a store card or gas card. These cards might be easier to get than a regular credit card, and they also help to establish your credit. To avoid debt, get only one or two of these cards, and pay your bills on time.

7

After using your credit cards appropriately for about a year, try to get a small installment loan from your credit union or bank. Pay the loan back on time.