How To Build A Credit History
Kiplinger's Personal Finance|November 2019
Credit newbies can take advantage of both tried-and-true methods and new alternatives.
Lisa Gerstner
How To Build A Credit History

Most lenders expect you to have a decent credit record to qualify for a loan or credit card. But if you’ve never had a credit card or taken out a loan, you don’t have much of a credit history.

It’s a conundrum that young people face as they begin their adult lives. And having no credit record (or a thin one) touches more than just your ability to borrow money. A landlord may check your credit report before offering you an apartment, and a wireless carrier may peek at your credit before offering you service or setting a price for a plan or device.

Fortunately, you can establish a credit history even without a track record. And if your credit report contains negative items, such as late payments or a bankruptcy, you can use some of the same strategies to rebuild credit.

Apply for a credit card. Using a credit card responsibly helps you get a foot in the door to good credit. To build a positive history, pay your bills by the due date and try to keep the balance to less than 20% to 30% of the card’s limit. The percentage of available credit that you use on your cards is known as your credit utilization ratio, and the lower it is, the better for your credit score. As you learn the ropes, make just a few basic purchases monthly— say, to buy groceries—to help ensure that you can afford to pay the bill in full and avoid carrying a balance from month to month, which incurs interest.

This story is from the November 2019 edition of Kiplinger's Personal Finance.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.

This story is from the November 2019 edition of Kiplinger's Personal Finance.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.

MORE STORIES FROM KIPLINGER'S PERSONAL FINANCEView All
How identity thieves are exploiting your trust
Kiplinger's Personal Finance

How identity thieves are exploiting your trust

Con artists themselves are disguising as well-known brands to steal your money and personal information.

time-read
3 mins  |
February 2024
CUT THE COST OF YOUR WIRELESS BILL
Kiplinger's Personal Finance

CUT THE COST OF YOUR WIRELESS BILL

AT&T, T-Mobile and Verizon dominate the market, but smaller outfits offer similar network coverage at lower prices.

time-read
10 mins  |
February 2024
MAKING HOME ENERGY MORE AFFORDABLE
Kiplinger's Personal Finance

MAKING HOME ENERGY MORE AFFORDABLE

Households in need can get energy-efficiency upgrades, help with utility bills and more from this nonprofit.

time-read
2 mins  |
February 2024
A HEAD START FOR SAVERS
Kiplinger's Personal Finance

A HEAD START FOR SAVERS

The Saver's Credit is designed to help low- and middleincome taxpayers contribute to a retirement account.

time-read
2 mins  |
February 2024
Say I Love You With a Money Date
Kiplinger's Personal Finance

Say I Love You With a Money Date

To nurture a lasting bond with your partner, meet regularly to talk about money.

time-read
2 mins  |
February 2024
Plan for Your Own Elder Care
Kiplinger's Personal Finance

Plan for Your Own Elder Care

AFTER I wrote a series of columns in 2022 about elder care planning for family members, I received a number of responses like this one: “What about married couples who have no children or whose family members don’t live nearby?” wrote one reader. “Or a single individual with no close relatives? How should these people plan for their own elder care?”

time-read
2 mins  |
February 2024
OVERCOME RETIREMENT OBSTACLES
Kiplinger's Personal Finance

OVERCOME RETIREMENT OBSTACLES

Most likely, you'll encounter setbacks on your journey. But with careful planning, you can surmount them.

time-read
10+ mins  |
February 2024
Find the Right Budgeting App
Kiplinger's Personal Finance

Find the Right Budgeting App

Mint is closing up shop. Luckily, you have alternatives.

time-read
4 mins  |
February 2024
How to Use Leftover 529 Funds
Kiplinger's Personal Finance

How to Use Leftover 529 Funds

OR families who want to save for their children’s future higher-education expenses, a 529 collegesavings plan offers alluring tax-advantaged benefits. You can withdraw funds tax-free for qualified educational expenses, such as tuition, room and board, books, and computers.

time-read
2 mins  |
February 2024
Smart Borrowing in an Era of Higher Interest Rates
Kiplinger's Personal Finance

Smart Borrowing in an Era of Higher Interest Rates

There are strategies you can use to lower the cost of new and outstanding debts.

time-read
9 mins  |
February 2024