Easy Ways to Build Credit

October 17, 2022

by Christian Phillips

Building credit takes patience and responsibility. Frandsen Bank & Trust wants to help consumers rebuild and first-time credit establishers.

Creditors and lenders will determine an individual’s “creditworthiness” based on the information disclosed in their credit report. Consequently, credit reports assist in calculating consumer credit scores which are also factored into the decision-making process.
Here are a few things to know: Credit reports comprise four categories; personal information, credit accounts, public records, and inquiries.
[Definitions]
What is a credit report? A detailed statement prepared by the credit bureaus outlining credit history. The report includes four categories; personal information, credit accounts, public records, and inquiries. Lenders will determine creditworthiness after analyzing the report summary.   
  • Personal information: Personal information is used to identify the applicant by listing name(s), address, date of birth, social security number, phone number, and employment history.
  • Credit Accounts: This report identifies information regarding loans. Type of account, lender’s name, loan amount, remaining balance, payment history, and loan status (open or closed).
  • Public records: Public records contain negative information that could affect future credit inquiries: foreclosures, bankruptcies, legal judgments, tax liens, and unpaid child support.
  • Inquiries: The last section of the report catalogs when an individual applies for a loan. Applications include; credit cards, credit increases, mortgage loans, car loans, and attempting to open accounts on telephone and internet services.  
[Credit Options]
Apply for a Credit Card:
There are different types of credit cards, and qualifications vary depending on the applicant’s situation. Approval for lines of credit may be challenging for specific individuals, especially those with limited or no credit history.

Become an Authorized User:
[Definition]
What is an authorized user? An authorized user is an individual that has permitted access to a primary account holder’s credit card account. Authorized users are not responsible for accrued credit balances. However, if the primary account holder is delinquent in repayment, it may affect the authorized user’s credit report. Becoming an authorized user can be a low-risk way of building some credit history, only if the primary is financially responsible.
 
Secured Credit Card:  
Applicants must submit a refundable security deposit when applying for a secured credit card. Select a card that offers no annual fees and reports to all three credit bureaus (Equifax, TransUnion, and Experian). *Individuals under 21 may need a cosigner unless reliable proof of income can be provided to the issuer.

Retail Credit Card:
Retail credit cards can either be closed-loop or open-looped. Retail credit cards generally have high-interest rates, but consumers will notice that application requirements are less restrictive.
[Definitions]
  • What is closed-loop? Known as a single-use credit card that can only be used at the retailer that provided it (Kohls, JCPenny, Home Depot, Best Buy, etc.) The card issuer sometimes allows purchases with partnered brands. 
  • What is open-loop? Co-branded with the retail company and payment service (Visa, American Express, Mastercard). The card can be used at the retailer and locations that accept the posted payment service.
Auto Loans:
Auto financing can be approved without a credit history, but depending on the lender, a cosigner may be required. What is the purpose of a cosigner? It helps the original applicant get approved for the auto loan by reducing the risk factor of non-payment. Cosigners have the same legal and financial responsibility as the primary applicant. The process will also help reduce interest rates and improve affordability for a first-time car buyer. 

[Final Thoughts]
Frandsen Bank & Trust offers a wide variety of credit cards. Our industry-leading credit cards have a full range of reward options, competitive pricing, and the current EMV chip technology. Contact your local Frandsen banker to determine which lines of credit best suit your financial situation.

For more information on Frandsen Bank credit cards, scan the QR code.

Related Posts

You are about to leave the Frandsen Bank Website.

The site you have selected is an external one located on another server. Frandsen Bank has no responsibility for any external website. It neither endorses the information, content, presentation, or accuracy, nor makes any warranties, express or implied, regarding the external site. Thank you for visiting Frandsen Bank.

Open a New Deposit Account

If you wish enroll in online banking, please click "Cancel" and navigate to the "Enroll in Online Banking" button below "Log In".

If you wish to open a new deposit account, please click "Proceed".

Thank you for banking with Frandsen Bank & Trust!

You are about to leave the Frandsen Bank Website.

The site you have selected is an external one located on another server. Frandsen Bank has no responsibility for any external website. It neither endorses the information, content, presentation, or accuracy, nor makes any warranties, express or implied, regarding the external site. Thank you for visiting Frandsen Bank.