Wednesday, February 21, 2018
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Building your credit from scratch

Submitted by the HealthNet Federal Credit Union

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.

So if you don’t have a credit history, where do you begin? Here are simple steps to get you started.

  • Credit Card – Several cards can start you off with a small credit limit. Shop for cards that fit your needs. With little to no credit history, you might have to start with a card that has a small annual fee.
  • Retail Account – If you need furniture or tires or electronics, some stores will offer credit accounts with a six to 12 months “same-as-cash” payback option. If you pay the account within the specified time period, you may not have to pay interest on your purchase.
  • Credit Builder Loan – If you have some cash saved up, you can use it as collateral at your financial institution.

Each of these will allow you to show creditors that you can handle small amounts of debt responsibly month after month. The most important thing to remember is to pay on time every month. Late payments leave a dent on your credit report.

If you’ve never had a credit account at all, you may need a co-signor like a parent or spouse. Remember, you and your co-signor are equally responsible for the debt. Failing to make a payment or paying late can directly affect your co-signor.

Other helpful tips:

  • Keep small balances. You don’t want to over extend yourself by purchasing more than what you can pay each month.
  • Don’t over-apply for credit. Excessive inquires can make you appear risky. Research which cards or accounts are best—before you apply.
  • Once you begin building your credit, check your credit report. You are allowed one free copy from each of the three major credit reporting agencies (Experian, Equifax, and TransUnion) once per year. If you request a copy from a different agency every four months, you are able to monitor your credit reports throughout the year.

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.


HealthNet Federal Credit Union
1591 Chickering Lane, Cordova, TN 38016
(901) 226-1111 |

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