Establishing Credit for First Timers

Man looking at his credit card

By Mary Jo Healey, Market Manager – Des Moines, Marine Credit Union

Establishing credit for the first time is not complicated, but it does require a bit of time. In order to have good credit, you must establish a “history” of using credit responsibly. Creating this “history” will require approximately 9 – 12 months in order to establish a pattern of usage.

Your history is reported, as it happens, to the three major credit bureaus and comprises the details of your credit report. Those in the credit industry, including lenders, will view your past performance (your history) as a predictor of your future performance.

Take the first step! Take out a share secured loan. For example, $1000 would be borrowed and then deposited into a savings account and be pledged against the loan. You would be required to make monthly payments until paid in full. At that point, you would have $1000 in your pocket. However, should you not pay the loan back, the $1000 in your savings account would pay the remaining balance on the loan.

Remember this one fact, your record speaks louder than your words of promise could ever do.

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