Establishing credit is one of the most important keys to achieving financial health and creating
generational wealth.

A good credit score shows you have a track record of borrowing money responsibly and is
important to landlords, mortgage lenders, financial institutions and more. The higher your
credit score, the lower your interest rates will be on credit cards and loans, helping you save
money over time.

Building a credit history from scratch can feel challenging since you need credit to build credit.
If you don’t have credit, you’re less likely to be approved for loans and credit cards, limiting
your ability to make major purchases that create financial stability for yourself and your family.

How can you build credit without having credit?

First, what does it mean to build credit?

All consumers have a three-digit score between 300 and 850. You want your score to be as high as possible, as lenders look at credit scores to make loan and credit decisions.

A credit score consists of your payment history, available credit, total balances, the mix of
credit type, length of credit history, and the frequency and amount of new credit you’re
applying for.

If you don’t have a credit history or you’re rebuilding your credit, your credit score will likely be
on the lower end. Here are a few simple steps, including some you may already be doing, that
can help start the year off on the right foot and improve your score:

1) Report rent or bill payments and pay on time. Ask a service provider, such as a landlord, to
report payment activity to the credit bureaus. Also remember to pay bills on time. Paying
your utility bills, rent, credit cards and loans on time can demonstrate fiscal responsibility to
lenders.

2) Apply for a store or gas card. Retailers and businesses often approve applicants with little
credit history for a card. Store cards usually carry a higher interest rate, but payments still
become part of your credit profile. Remember to try to pay off the balance each month to
avoid raking up interest.

3) Open a bank account and consider a new-to-credit card:

Although checking and savings
accounts don’t factor into your credit score, lenders can review them to see how fiscally
responsible you are. And in the case of Chase Freedom Rise, which is designed for new-to-
credit customers, having a Chase checking account increases your likelihood for approval.

4) Become an authorized user or joint account holder. Ask a trusted family member or friend
to be added to their credit card. You’ll get an extra card with your name on it, and activity
from that card will be reflected on your credit report over time. Be sure this person has a
good history of on-time payments and low credit utilization – if they have bad credit habits,
it will reflect on your credit, too.

5) Find a co-signer. Apply for credit jointly with someone who already has an established
credit history. Remember, the co-signer is putting their credit on the line for you, so keep
up with your payments and don’t overspend.

These options can help you demonstrate your creditworthiness, and you may start seeing your
score rise sooner than you might expect.

Resolve to build credit in 2024

It’s never too late to build — or rebuild — your credit. As you make your resolutions for the new
year, put credit building near the top of your list. Not only will good credit help you have a
happy new year in 2024, you’ll see your hard work pay off for many new years to come.

Sponsored content by JPMorgan Chase

The post 5 Tips to Help Improve your Credit Score in 2024 appeared first on Arizona Informant.

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