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for people with disabilities, credit is key in a crisis | Personal finance

How to start building your credit

Building your credit can be a challenge if you are struggling financially. But it is not impossible. It is mainly about learning how to manage the debts you incur. In fact, Noon Kay credits her mother’s financial lessons with the good credit she has today.

Here’s how you can get started:

Open an account that is reported to the credit bureaus

Most credit scoring models don’t take rent or utility payments into account, but credit cards and loans are typically reported to the three major credit bureaus. Getting a credit card is one of the easiest ways to make sure your account is actually helping your credit, and there are options for those with low or low credit. (More on this below.)

Make payments on time

Once you have an account reported to the credit bureaus, make each payment on time, as this is one of the most important factors in your credit rating. If you have a credit card, you don’t even have to pay off your entire balance. As long as you pay your minimum payment, you will be able to protect your credit.

But remember: Just paying your minimum balance isn’t a great long-term solution. Interest on credit cards will likely be much lower than on a payday loan, but the APR will generally stay in double digits.

Hazel J. Edmonds

The author Hazel J. Edmonds