Building credit can be tricky. There are many factors that impact a person’s credit profile (both for the positive and the negative), but they are important to understand on your path to financial freedom. Many processes involve a routine credit check, including getting an apartment, financing a new car, or even getting your first credit card.

Bad credit – or no credit – can certainly cost you. And it could cost you more than you think. More and more, employers are verifying credit history of job applicants, and landlords are checking an applicant’s credit score before allowing them to sign a lease. The bottom line is that poorly established credit can really drag you down.

One of the most popular recommendations regarding improving your credit score is to get a credit card and pay it off responsibly in order to give your credit score a boost. While that may work well for some people, it’s not as easy as it sounds.  There are lots of parameters on how to handle the balances and payments.  There are other ways to improve your credit profile without the risk associated with getting a credit card. Orion FCU is here to help you succeed! Here are 3 easy ways to improve your credit profile:

man calculating finances

CD-SECURED LOAN

Whether you are looking to establish credit for the first time, or rebuild your credit, a CD-Secured Loan is a great place to start. A CD-Secured Loan borrows against your CD/Share Certificate. Simply put, you take a loan out against money that you already have in a locked savings account, just for the purpose of building your credit.

Orion FCU offers CDs with terms between 1 year and 5 years, and minimum deposits as low as $500. As you make payments on your loan each month, proving you can establish a payment history on a loan, you boost your credit profile. With little risk for both you and the financial institution, a CD-Secured Loan can be granted with no credit history at all.

SECURED CREDIT CARDS

Although we are sharing ways to boost your credit without a traditional credit card, it is worth mentioning a secured credit card as a viable option to improve your credit. A secured credit card is backed by a cash deposit. Simply put, you are “pre-paying” your credit limit like a pre-paid debit card, but with all the benefits to your credit. Orion FCU offers a secured credit card option with a low minimum balance ($300). 

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CONSOLIDATION LOANS

If you have multiple loans with different financial institutions, consolidating your loans can save you time and money, but can also boost your credit score. Orion FCU can consolidate your loans to pay off other loans with higher interest rates. You can consolidate your loans with an Orion Personal Loan or you can secure your loan with other collateral, like a vehicle. Consult your local Orion FCU branch for more information about how a loan consolidation could help your credit.

Whether you are looking to build a credit history or work to repair a negative one, make sure you get in the habit of checking your credit regularly to see what lenders, potential employers, and landlords may see when checking your credit report. While checking your credit score frequently can actually harm your credit, there are sources like Annual Credit Report that provides free credit reports. It is ideal to maintain a clean report with no collections. 

It is definitely not necessary to apply for credit or retail cards to build your credit. For more information on how Orion FCU can help you better your credit history, visit a branch or contact us today.

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