The world of credit can be a vicious circle. Many who want a credit card cannot get one because they do not have a high enough score to qualify for a card and are continuously turned down. Working against them is the fact that one of the best ways to establish their score is by responsibly using the card that they were not granted. Many come to us asking “how and what can I do to build my credit in Philadelphia?” To help you receive an answer, we have laid out several ways you can build credit through credit cards.
Secured Credit Cards: These are a great way of building a reputable credit score and as long as you have the money up front to back your spending limit, you are more than likely qualified for one. Before receiving the card, you are required to make a cash deposit that is used as collateral to eliminate the chance of you defaulting on the issuer. When using this style, it is important to make sure the company reports back to a credit bureau to prove your payment history.
Student Credit Cards: If you are in college, these are a great way to build your credit as the companies typically accept most students. You can often find banks and student cards that offer promotions and rewards as incentives. However, on these cards you will have a limited amount of available credit and if you cannot pay it all off at once, you will face higher interest rates.
Retail Credit Cards: These cards are similar to student credit cards in most aspects. Stores are willing to give them to most applicants, but at the price of a low spending limit and steep interest rates. However, cardholders typically receive discounts and special promotions. As long as you are careful with your spending, they can be a great way to establish enough credit to qualify for a traditional credit card.
Authorized User: If you have a close family member, you can ask them if they will sign you on to use their credit card. The card’s history will reflect positively when it is reported to a credit bureau, and it will help build you and your family member’s scores. However, regardless of who is responsible, if a payment is missed, it will show on both reports.
It is always important to remember that while these are great methods for building your credit, they are just as dangerous and can hurt your score as much as they helped it. If you would like help establishing your credit score or understanding your credit reports, visit our team in Philadelphia or call us today at 877-260-2252