7 Smart Ways to Establish Credit

Why Building Credit Matters

When you are aiming to purchase a car, rent a home or qualify for a loan, lenders look for evidence of your financial reliability. A solid credit history can reassure them that you are a trustworthy borrower. If you are just starting out with no existing credit record or have limited credit history, you’ll need to build credit. Here are some tips to get started.

1. Apply for a Secured Credit Card
   You may not qualify for an unsecured credit card right away, but a secured card is a great first step! It typically requires a deposit that is used as collateral—usually equal to your credit limit—and can be used just like a regular credit card. Make your payments on time, and as you build a solid credit history, you could upgrade to an unsecured card and get your deposit back.

2. Pay Off Your Balance in Full Every Month
   Aim to keep a $0 balance on your credit card from the start. This prevents interest from accruing on debt and shows lenders you can pay back the money you borrowed.

3. Request a Credit Limit Increase (When It Makes Sense)
   Once you have established a consistent payment history on your credit card account, consider requesting a higher credit limit. This can lower your credit utilization ratio, but only if you continue using credit responsibly.

4. Ask Someone to Co-Sign a Loan
   Often, as a new borrower, you may need help from someone who has already established their credit. A co-signer with good credit can help you qualify for loans or credit cards. Just remember, missed payments will impact both your and your co-signer’s credit, so use this option cautiously.

5. Become an Authorized User on Another Person’s Credit Card
   If a family member or trusted friend adds you as an authorized user on their credit card account and consistently makes on-time payments, their positive payment history can boost yours.

6. 6. Check Your Credit Report Regularly
   Staying aware of your credit health helps you track progress and catch potential issues like errors in your credit history or signs of identity theft. You’re entitled to a free annual credit report (opens in a new tab) from each of the three nationwide credit bureaus: Experian, Equifax and TransUnion.

7. Keep Your Credit Utilization Low
   As a rule of thumb, try to use less than 30% of your available credit (opens in a new tab) at any given time. Even if you pay in full each month, a high balance near your limit can hurt your score.

Your Credit Journey Starts Here

Credit is more than just a number—it is your key to financial opportunities. A 1st Defense™ checking¹ account is a smart way to manage your money safely, track your credit score and stay protected from fraud.

While it won’t build credit directly, it gives you the tools and insights to make informed financial decisions as you work toward establishing and improving your credit.

Federally insured by NCUA.

¹_{Eligibility: Benefits are available to personal checking account owner(s) and their joint account owners subject to the terms and conditions for the applicable Benefits. Some Benefits require authentication, registration and/or activation. Benefits are not available to a “signer” on the account who is not an account owner or to businesses, clubs, trusts and/or organizations.}