Building Credit 2022 Part 2

I know you must be thinking how can I get approved for a 10k auto loan or a credit card without a credit history? Good question, there are cases when financial institutions will approve students or approve you for a credit card with annual fees or high interest rate. Annual fees are steady yearly fees the company will charge for having the card. Always ask if there are annual fees before applying.

Consider this when applying for a credit card. Is there an annual fee? What is the interest rate? If you have found yourself applying for a credit card several times but you have no luck here are 2 options that can help you:

A secured credit card works like this; The bank is saying you don’t really have any credit history, or we are not sure of your ability to pay us back, so this is what well do. We will approve you for a small limit like $500. In turn, you will give us a $500 deposit. Show us you can be responsible with the credit card by paying on time, never being late, and not carrying over large balances then we’ll give you the $500 back in 6 months. At that point when we give you your $500 back then your card will be unsecured, meaning there is no collateral (the $500 you paid) attached to this card anymore. In some instances when they have graduated the card from secured to unsecured you can now ask for a credit limit increase.

Find a company like “Self”, the credit builder website. You open an account and choose a target amount to save every month. This will now become your obligation every month for 1 year. Each on time monthly payment will be reported to the credit bureaus as a successful payment towards your “loan” (you are really paying yourself). With each payment your credit score will increase. At the end of the 12 months the company will cut you a check for the amount you saved.