Ways to Build Credit Application

Decide which credit method is being used.

Identify the credit method

Michael gets financing for his car through his credit union. His monthly payment is fixed for three years. Michael makes each payment on time, which helps him build credit by showing a strong history of paying off debt responsibly.

Identify the credit method

Sarah is new to credit and doesn’t have a credit card yet. Her mother adds her name to her credit card account. Since her mother has good credit and always pays on time, Sarah benefits from this positive history. This helps Sarah establish a credit profile and increases her score, even though she’s not primarily responsible for the payments.

Identify the credit method

After struggling with credit in the past, James decides to rebuild his credit. He deposits $300 to open the card. He uses the card to pay for recurring expenses, like his phone bill, and consistently pays off the balance in full. He can never charge over $300.

Identify the credit method

Lisa is about to graduate. Although she has a job and $1,000 in savings, she has no credit. She decides to borrow $1,000 from the bank. She made 2 monthly payments of $100 until she lost her job. With no job she defaulted and the bank withdrew $800 from her savings. 

Identify the credit method

Alex borrows $1200 from his credit union. Each month he pays $200 a month toward the loan, which is reported to the credit bureaus. After he makes the final payment he receives access to the $1200. 

Identify the credit method

Rachel needs new equipment for her photography business. The bank is willing to lend her money, but she doesn’t want to pay the high apr. Her brother offers to help her secure a loan with a lower apr.