The best solution is to try obtain A credit builder loan is a short-term loan that you can use to establish credit. These loans are offered by banks and credit unions and they’re typically for a small amount, usually no more than $500.Instead of actually getting the cash in hand, it’s parked in an interest-bearing account. Once you pay the loan off, you’ll get the money back along with any interest earned. Not only that, but you’ve also built up a positive payment history in the process.
2. Get a Secured Credit Card
A secured credit card is a stepping stone to building credit. With this kind of card, you have to put up a cash deposit to get a card.
You can use a secured card to build credit, but they’re not hassle-free. These cards tend to charge higher interest rates and fees compared to a traditional credit card so you need to make sure to review the rates and costs carefully before you settle on one.
3. Ask to Be an Authorized User
An authorized user is someone who has charging privileges on someone else’s credit card account, like a parent or a spouse. You get your own card with your name on it and you can reap some positive credit benefits even if you don’t use it.
The reason? The original cardholder’s account history for the card will get transplanted onto your credit report. If they’ve always paid on time and kept the balance low, it’ll help to bump up your score.
If you’ve ever been shopping at a major retailer you’ve probably been offered a store credit card at some point. These are cards that are branded to specific stores like Macy’s or Target.
These cards have some drawbacks, since they usually have higher APRs and lower credit limits, but they’re great for newbies who are trying to build credit. It’s usually easier to get approved for a store card, even if you have a lower credit score.
The fact that you have limited charging power is also a plus since it keeps you from getting in over your head with debt. Just remember to pay your card off in full each month so you don’t get gouged on the interest.