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When it comes to building credit, everyone has to start somewhere. Most people consider
applying for credit cards to build their credit. For those starting from scratch, most companies
won’t approve a credit card without the individual having credit history. If you are facing this
issue, don’t be discouraged. There are other ways to build credit. Here are a few things you can
consider.

Personal loans

Many people find success when they apply for a personal loan for a small amount. You can build
credit by making monthly payments on the loan. It’s best to use your personal loan for a
necessary expense, like a computer or school costs.

CD Loan

If you have a Certificate of Deposit, you can use it as collateral to get a secured loan. The loan
will be paid back in installments over time. This is a great way to use what you already have to
build your credit and grow your score.

Use a co-signer

Whether you apply for a personal loan or auto loan, consider having a family member co-sign. A
co-signer will increase your chances of qualifying for a loan. They will be responsible for paying
the loan if you do not. If you’re applying for a credit card but you are under the age of 21, you
must have a co-signer or show you make enough to repay what you spend on your card.

Be responsible

Keep a few things in mind as you begin your journey. First, you don’t have to carry a balance to
build credit. Pay off your credit card balance each month to avoid interest charges. Second, don’t
spend more than necessary. It may be exciting to break into your new card, but try not to use
over 30 percent of your available credit.

Finally, and perhaps most importantly, don’t miss a payment. Late payments can show up on
your credit report for years. Do your best to make every payment on time even if all you can
afford is the minimum payment.

Loans at FirstBank Southwest

If you would like to learn more about personal loans and other ways to build your credit, contact
a loan officer at FirstBank Southwest. We can discuss your needs and help you determine the
best option. Stop by your nearest FirstBank Southwest location or call us at (806) 355-9661.

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