Were you recently denied a loan or credit card because you didn’t have a credit score? And now you’re determined to establish credit history so you can get approved?
The good news is it’s not as difficult as you may think to build credit. But it could take a bit to get a credit score. FICO scores are used by 90% of lenders to make credit decisions and can be generated in 6 months. Or you may have access to a VantageScore, an alternative credit score, shortly after your credit activity is reported to the bureaus on your behalf.
How to Build Your Credit History
Ready to begin building your credit history? You have several options to get started and create a solid foundation that will benefit you for years to come.
Become an Authorized User
Do you have a relative or friend with exceptional credit history? Ask them to add you to their credit card account as an authorized user. If they agree, the payment history will be added to your credit profile. This helps you build credit fast and could help you get a FICO score before the 6-year window.
Confirm that the credit card issuer reports account activity to the 3 credit bureaus: Equifax, Experian and TransUnion. Also, know that you can request to be removed as an authorized user at any time.
Open a Secured Credit Card
Want a credit card in your name? Apply for a secured credit card to have access to a credit line while building credit history. The credit card issuer will require you to make a deposit that’s equal to the credit limit before opening your account.
When evaluating secured credit card products, be sure that they report to the credit bureaus. Otherwise, your account activity won’t be reported to the credit bureaus, and it won’t help you establish credit history.
If you manage the card responsibly for an extended period, the credit card issuer may convert the card to an unsecured product. You will also receive your deposit back. But if you fall behind on payments, you risk losing your deposit as the credit card issuer closes the account and applies the deposit to your outstanding balance.
Get a Credit Builder Loan
A Credit Builder Loan is another excellent option to build credit. MoneyLion offers an affordable option that can help you get started and put up to $1,000 in your pocket in just minutes.
To qualify, you need an active checking account that’s at least 60 days old and in good standing. The transaction history should also demonstrate a steady stream of income. Worried you won’t qualify because you’re out of work? Unemployment income, government benefits, alimony and child support are also considered.
There are no credit checks, and the application process is seamless. Simply download the MoneyLion app to your mobile device, link your bank account and complete the brief application. If approved, you will receive the loan proceeds in your bank account right away. MoneyLion may withhold a portion of the proceeds in an interest-earning Credit Reserve Account. When your loan is paid in full, these funds are yours to keep.
Loan payments are automatically deducted from your bank account. So, you never have to worry about missing a due date and incurring penalties. Each time a payment is processed, the activity is also reported to the credit bureaus, which helps establish an exceptional payment history.
The credit builder loan from MoneyLion is a component of the Credit Plus membership. It’s only $19.99 per month to access this loan product, and your membership also includes credit tracking, weekly credit score updates, access to 0% APR cash advances of up to $250 through the Instacash feature, and more.
See if you qualify for a Credit Builder Loan.
Improve Your Credit Health Over Time
When you have enough credit history to generate a score, you should continue working to improve your credit health. Beyond keeping tabs on your credit report and understanding how credit scores are created, here are some tips to keep in mind:
Make timely payments
Keep your outstanding debt balances down
Only apply for new credit as needed
Don’t close idle accounts
Maintain a balanced mix of revolving and installment debt
It’s not just timely credit card and loan payments that can help boost your credit. You can use our partner LevelCredit to also get your on-time rent, utility, and other payments reported to the major credit bureaus to help improve your credit score. Learn more here.
Take advantage of credit building and monitoring from MoneyLion. With Credit Builder Plus, you will receive real-time credit alerts any time activity occurs in your credit profile. Plus, you can view your credit score 24/7 directly from the online dashboard and build your credit with a loan up to $1,000.
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Disclosures
Credit Builder Plus membership ($19.99/mo) unlocks eligibility for Credit Builder Plus loans and other exclusive services. This optional offer is not a Pathward product or service. A soft credit pull will be conducted which has no impact to your credit score. Credit Builder Plus loans have an annual percentage rate (APR) ranging from 5.99% APR to 29.99% APR, are made by either exempt or state-licensed subsidiaries of MoneyLion Inc., and require a loan payment in addition to the membership payment. The Credit Builder Plus loan may, at lender’s discretion, require a portion of the loan proceeds to be deposited into a reserve account maintained by ML Wealth LLC and held by Drivewealth LLC, member SIPC and FINRA. The funds in this account will be placed into money market and/or cash sweep vehicles, and may generate interest at prevailing market rates. You will not be able to access the portion of your loan proceeds held in the credit reserve account until you have paid off your loan. If you default on your loan, your credit reserve account may be liquidated by the lender to partially or fully satisfy your outstanding indebtedness. May not be available in all states. Credit Reserve Accounts Are Not FDIC Insured • No Bank Guarantee • Investments May Lose Value. For important information and disclaimers relating to the MoneyLion Credit Reserve Account, see Investment Account FAQs and FORM ADV.
Credit score improvement is not guaranteed. A soft credit pull will be conducted which has no impact to your credit score. Credit scores are independently determined by credit bureaus, and on-time payment history is only one of many factors that such bureaus consider. Your credit score may be negatively impacted by other financial decisions you make, or by activities or services you engage in with other financial services organizations. MoneyLion is not a Credit Services Organization.
MoneyLion does not provide, nor does it guarantee, any third-party product, service, information, or recommendation. The third parties providing these products or services are solely responsible for them, as well as all other content on their websites. MoneyLion is not liable for any third party's failure with regard to those advertised products, services, and benefits. These advertised products and services may not be FDIC insured or bank-guaranteed, and may be subject to a different privacy policy than MoneyLion’s. You should check individual offers, products, and services to become familiar with any applicable restrictions or conditions that may apply. MoneyLion may receive compensation from third parties for referring you to the third party, their products or to their website.
Instacash is a 0% APR cash advance service provided by MoneyLion. Your available Instacash advance limit will be displayed to you in the MoneyLion mobile app and may change from time to time. Your limit will be based on your direct deposits, account transaction history, and other factors as determined by MoneyLion. This service has no mandatory fees. You may leave an optional tip and pay an optional Turbo Fee for expedited funds delivery. For a $40 Instacash advance with a Turbo Fee of $4.99, your repayment amount will be $44.99. Generally, your scheduled repayment date will be your next direct deposit date. An Instacash advance is a non-recourse product; you will not be eligible to request a new advance until your outstanding balance is paid. See Membership Agreement and help.moneylion.com for additional terms, conditions and eligibility requirements.