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Establishing Credit & Building Credit Scores

“In life, try your best to do the right thing. Have fun while you’re alive. Take advantage of every asset you have. Don’t take anything for granted.” – Justin Chon

As an individual, it is extremely important to understand the credit scoring landscape in order to achieve financial success. In the credit and lending sphere, your credit profile/score is a direct reflection of your credit-worthiness.

Typically, it is difficult to attain a line of credit or a loan without establishing a robust credit profile first. Those with limited credit, who do gain approval for a credit card or loan, will find themselves paying much higher rates and pricing due to their greater risk of default. But how do you build credit, when you don’t qualify for credit?

Below, are the most-popular outlets that you can use as a vehicle to establish your credit profile:

  • Apply for a retail credit card
  • Become an authorized user
  • Apply for a credit builder loan
  • Become a co-signer on a loan
  • Apply for a secured credit card

As you can see, there are a variety of options available that are designed to help individuals with minimal-to-no credit establish a good-standing credit history. Age of credit history is one component of a credit profile, so you should not wait to establish credit when you need credit or funding.

To keep a good credit score be aware of the things that most negatively affect your credit:
  • Bankruptcy
  • Foreclosure
  • Repossessions
  • Court Judgments
  • Liens
  • High “debt to credit ratio” Balances divided by Limits on Revolving credit.
  • Collections, Charge-offs
  • Past due payments
  • Credit Inquiries
This is not all inclusive but gives you an idea of the items you really need to pay attention to maintain a good credit score.

Developing a credit profile is not something that happens overnight and the longer you wait to establish your credit, the longer your lack of credit history will affect your score.


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