Credit Cards can Help Build Credit

Using a credit card is one of the fastest and easiest ways to build credit or improve your credit score. Responsibly using credit cards allows you to demonstrate to lenders that you can manage payments. The earlier you begin, the better.

How to Begin Establishing your Credit

A healthy credit history can actually help you save money! The higher your credit score, the lower your interest rates will be on loans, therefore saving you money in interest over the life of the loan.

Here are three ways you can start building credit:

1. Payment history. Make sure you’re paying your bills on time!  Try to have alerts in place to remind you when bills are due and make at least the minimum payment due. Missed and late payments get reported back to the credit bureaus, which hurts your credit.
2. The amount of credit you’re using.  When you have a credit card, you’re approved for a specific credit limit.  How much credit you’re using is called your credit utilization rate.  The higher your utilization rate, the lower your credit score, because it makes lenders concerned that you may be spending more than you can pay back. 
3. Account Mix. Opening different types of accounts allows you to have a mix of accounts that help build your credit. In addition to credit cards, MVCU also offers a credit builder loan. This loan helps you establish or even fix credit so you can let lenders know that you’re a safe bet before they lend you large sums of money.  Learn more about our credit builder loan.  

MVCU has credit cards designed to fit your needs. Begin building your credit today by applying for a credit card.

Category: Budgeting & Debt Reduction