Finance & Loans

How to establish credit

If you are starting after your college or if you just arrived in U.S. on permanent resident visa, you need to establish a credit history in order to obtain a mortgage or other type of financing. Here are some practical ways that you can start.

Open a bank account: This will assist you in creating a financial history. Some banks may even consider giving you a credit card provided that you deposit certain amount in a savings account and keep it for a specified period of time.

Establish a residential history: If you are starting fresh, you don’t have to own a home. You can rent an apartment or a home depending on your financial capacity and needs. Make sure to pay your bills on time. Establish utility accounts in your name and pay those bills on time. If you completely miss or pay your bills late, utilities may report to credit agencies creating a bad credit history.

Get department store cards: This is a great way to establish credit. Make your monthly payment on time. Do not pay the entire balance. Stretch payments in an affordable manner in order to establish credit. This will also help you to create a credit history.