Once, credit cards were only for the privileged few. The rest of us used cash – and when there was no more, we either had to borrow from a friend or family member, or make do till next payday. Today, qualifying for a credit card is easier then before. Establishing a positive credit record, however, requires dedication and patience.

Whether you are new to credit or are trying to “clean up” past mistakes to reestablish a favorable record, you may encounter a frustrating paradox: you must have and use credit to create a credit history, yet many financial institutions are reluctant to extend credit to someone without an established record. But don’t despair – there are several good remedies for both situations.

  1. An excellent start is a secured credit card. Your credit limit can start at $250. The SDFCU Savings Secured Visa® Platinum Card has no annual fees and you still earn Flexpoints Rewards points while you build your credit.
  2. Consider a local retailers credit card. Their criteria is often less rigorous then larger credit issuers. Be sure they subscribe to the major credit reporting agencies though – if not, you won’t be establishing a credit history.
  3. Another option is having someone with a positive credit record cosign an account for you. This requires a great deal of trust on the part of the cosigner – if you fail to pay, he or she is responsible. You could end up jeopardizing a relationship as well as a credit record.
  4. Monitor your credit score and see what loan rates you qualify for in the free SavvyMoney tool accessible through SDFCU’s Online Banking.

Once you have a credit line, establish a good history by using it responsibly. Keep balances low, always pay on time, don’t pursue unnecessary credit, and stick with a few good credit instruments of various types.

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