How to Open a New Credit File
- 1). Pay utility and cell phone bills on time. Utility companies do not report timely payments to credit reporting bureaus, but they do report late or missed payments. Paying your bills on time doesn’t open a new credit file. Late or missed payments can open a credit file, but for the wrong reasons.
- 2). Get a pre-paid credit card (see Resources). Check online to make comparisons, as there are many cards. It’s important to get a pre-paid card that offers credit building. Use your pre-paid card for purchases in the same way as a regular credit card. Top-up payments and certain purchases get reported to the credit reporting bureaus and a new credit file will be opened.
- 3). Choose a co-signature credit card. Ask a friend of family member with a good credit record to apply to get a second card. Register it for credit building. Lenders offer co-signature cards to help people build credit. The main cardholder is liable if you fail to pay, so make certain you use the card wisely. Using your card opens a credit file and improves your credit rating.
- 4). Obtain a secured credit card (see Resources). Many are available. Check online to get the best offers. You need to deposit money with the card issuer. This is held as a guarantee against non-payment. Your card issuer will tell you your credit limit. This can be between 50 percent and 100 percent above the amount deposited. Secured card usage is reported to credit reporting bureaus.
- 5). Apply for a store card. Store cards can be obtained more easily than regular credit cards. Interest charges are high, but if you clear the balance monthly, no interest is charged.
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