Tips For Establishing Credit For The First Time | Refresh Financial

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Tips For Establishing Credit For The First Time

 Tips For Establishing Credit For The First Time

Establishing and building credit for the first time can be difficult. How can you be trusted with credit products, if you don't have any credit history? How are you supposed to get started? Luckily, there are some easy ways around this dilemma. Here are some great tips for establishing credit for the first time!

1. Secured Card

- This is one of the most common methods for establishing a credit score. Unlike a traditional credit card, a secured card means you will have to put some money down first, as collateral, to make it less risky for the lender. A secured card can be used just like a traditional credit card. Your repayment habits will be reported to the credit bureau, and just like that, your credit journey begins! If you’re interested in this sort of credit card, click here.

2. Secured Savings Loan

- This is arguably the most effective method to establishing and building a healthy credit score. It mainly differs from a traditional loan in this way: instead of receiving cash at the beginning, you'll receive the payout at the end of the term. In many ways, it's easier than a secured card because you don't have to come up with any security deposit and there are no upfront fees. Every payment you make throughout your term is reported to the credit bureau, which will skyrocket your score! You can find out more about secured savings loans here.

3. Co-signer

- Another option towards building a credit history from scratch is to have a co-signer. This reduces the risk for the lender because if you fail to pay the debt, the co-signer will then be on the hook for what is owed. Be careful with this method, as co-signing for credit can easily put stress on the relationship between the borrower and co-signer. Be sure to enter into this agreement only if you are willing and able to pay everything back you owe.

Once you've chosen one of the listed strategies and you're actively borrowing money, you'll need to make sure you're doing so responsibly. Here are a few pointers for your first form of credit.

1. Never Miss A Payment

- Do whatever it takes to remind yourself when bills are due! Smartphone reminder apps work great to ensure you never miss a payment. Missing a payment will reflect negatively on your credit report and could haunt you for years, so make this a priority!

2. Late Payments

- Same deal as a missed payment. If it shows up on your credit report, it will drag down your credit score.

3. Pay More Than The Minimum Payment

- If you can manage, pay off your entire credit card bill every month. This practice will build your credit score, and prevent you from paying extra on interest. If you’re looking to purchase a vehicle or a home in the future, this practice will make sure your credit report does not get in the way of that.

If you take credit seriously and practice the advice mentioned above, there's no reason why you won't succeed in building a strong credit score. Down the road, you'll enjoy the many perks that come with it, like your choice of rewards cards, and access to the lowest interest rates!

What are some tips you would give to Canadians who are just starting out with credit? Let us know in the comments!

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    What Canadians are saying about Refresh

    I would like to thank Refresh Financial for helping me get out of a bad spot. I never thought it was possible and almost gave up on things and then I saw Refresh Financial and and gave it a try. At first I was unsure of things but to see my credit score now makes me a believer in this program.

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    Refresh helped me regain credit following a nasty divorce, which left me with a very poor rating. They were able to remarkably help me go from a 480 to a 600 score, in just over a year. Thank you Refresh!”

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    I have watched my credit score jump since being with Refresh and I have already recommended it to friends and family. Thank you for helping me build my credit faster for my future and my children’s future :)”

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    At first I was skeptical because I wasn’t getting funds upfront and had to make payments when I really needed the money. I’ve been in the program a year now and have noticed my credit has improved drastically!”

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    I have been a client of Refresh Financial for approximately 3 years. Since being a client they have improved my credit immensely. Definitely recommend this company to anybody that needs help re-establishing credit.”

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    “I would like to thank Refresh Financial for their professionalism, great customer service and for helping get back to a better financial situation. I have always been treated with the utmost respect.”

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    Refresh Financial is an amazing program to help people get back on their feet. I was rock bottom with nowhere to turn. My credit was beyond poor. I would recommend them to anyone. If I can do it surely anyone else can.”

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    “Great company to deal with for rebuilding credit, very simple process to get started. Good service if you ever have questions.”

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    This business truly cares about its clients. The customer service is always quick to return calls or emails. Their online portal functions very well so as a customer you are always updated as you progress with your loan.

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    “Refresh Financial has made us more aware of how to take care of our financial situation and be more responsible, and making payments on time is rewarding in the end for credit. Thank You sincerely.”

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    This company has been nothing but fantastic. They have gone above and beyond to help me. This program has given me the relief and peace of mind I need. I would certainly go back to them and give them names of people who could use this.”

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    The financial services products are excellent for new immigrants, low-income earners and small business owners. Loans, savings and credit building all in one solution is a perfect fit to help with financial goals and stability.”

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    “After successfully going through a credit rebuilding loan, I was able to use my built-up equity to purchase a newer vehicle and I have since been approved through a financial institution for a loan.”

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    “I made some poor credit choices when I turned 18 and have always had this lingering thought of how am I ever going to better my score. Since being with Refresh I have realized that I took the right step towards bettering my future.”

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    “Thank you Refresh, and my relationship manager for giving me the tools for a better score with a secured card and two credit builder loans. I feel absolutely confident I’m on a better path to financial success. I am happy to be a long term client.”

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    I’m so excited I’ve joined refresh! I’ve already seen a huge increase on my credit after the first month! The staff are a delight and make this so easy to understand. I strongly recommend Refresh Financial even if you have good credit this will give you a boost and you’re saving money with the reverse loan!”

    – Wayne B