If you’ve never had any credit accounts in your name, you may find that it’s difficult getting approved for loans. Without a credit history, you’ll find that it’s nearly impossible to rent an apartment or get a credit card. There are various ways to establish credit, and the methods you use should depend on the reason why you’re trying to build your credit, and whether you want to build your credit with a credit card or not.

Here are five best ways to establish credit:

1. Get a Secured Credit Card:

Secured Credit Card

If you have no credit history at all, you may want to start with a secured credit card. This type of credit card is like a traditional credit card, except this one requires a cash deposit that is used as collateral. The deposit is basically a form of protection for the card issuer if someone decides to use the card and never make any payments towards the balance. There are many places you can get a secured credit card, such as at most banks and credit card companies. You’ll likely see a cash deposit ranging anywhere from $200 to $500, and it’ll equal the credit limit you are given.

2. Pay More Than The Minimum Payment:

Minimum Payment

When you have a credit card of any kind, you’ll have to make a minimum monthly payment, depending on your credit limit. The best way to start establishing credit is to make sure you make your monthly payments, and that you make extra payments whenever possible. Making extra payments not only gets your credit card paid off at a quicker rate, but it also reduces the amount of interest you’ll end up paying. If you’re only able to pay the minimum payment and then an extra $10-$20 extra, that’s okay because anything extra helps decrease the balance owed, which greatly impacts your credit score.

3. Pay Off Your Debt:

Pay Off Your Debt

To establish and build your credit, you’re going to want to pay off your debt. Use a free and reputable credit website to find out your score and what debt you have. If you have an addiction, that addiction may be contributing to your debt–especially if the subject of your addiction is expensive. If you’re serious about building your credit, you should consider getting help for your addiction. Find an inpatient program in your area such as Hotel California by the Sea Cincinnati to be surrounded by professionals that know how to help you through this difficult time in your life.

Read more: 5 Proven Ways to Reduce Your Credit Card Debt

4. Consider a Cosigner for a Loan:

Cosigner for a Loan

Oftentimes, when you do not have a solid credit history, you’re unable to get a loan by yourself. The good news is that you can usually have someone with an established credit history cosign a loan with you. The person cosigning a loan with you is taking a big risk, putting their credit on the line for you. If you have someone cosign a loan with you, you have to be willing to pay the loan off when it’s supposed to be paid off.

5. Limit Your Spending:


Having a credit card is a wonderful way to establish and build your credit, but it’s never a good idea to max out your credit card. A large percentage of your credit score is influenced heavily by how much you’ve used your credit card. Your credit score can definitely end up taking a blow if you use more than 30 percent of the available credit limit. There are certain circumstances where you might have to max out your credit card, such as real emergencies, but you shouldn’t decide to max it out just because it’s there. A good way to have more money to set aside for your credit card or loan payments is to budget your money wisely. The less money you spend on things you don’t need, the more you’ll have to spend it on more important things.

Building credit takes time, but it’s something that needs to eventually be done. It can be helpful to start building your credit at a young age to give you a better chance of being approved for a mortgage, car loan, or whatever financial decision you may want to make in the future.

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Ariana Smith is an enthusiastic fashion blogger and freelancer content writer. She loves to write and share knowledge of the latest fashion trends, fashion, and shopping tips and tricks. She is the chief editor at FollowTheFashion.

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