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4 Ways to Build Your Credit in Miami

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Have you ever applied for a loan, but were denied? We understand how this can feel. Rejection is never easy, especially when it comes to something you not only want, but need like a car or house. There’s many reasons as to why a loan application can be denied, but a very common reason is having too thin of a file aka not enough credit history. young hispanic girl with red hair in coffee shop in miami

Having a thin file can cause your loan application to be rejected because it doesn’t give a lender enough information on how dependable you will be in terms of paying back your loan. If you’ve been denied because your file is too thin, here are some ways you can build your credit and get on track to getting approved.  

Apply for a Credit Card 

Applying for a credit card can be an easy start when it comes to building credit. The best way to put this to use if you’re trying to build credit is by charging simple things on it, such as gas or groceries and paying all or most of the balance back at the end of the month. To get even more out of your credit card, try getting a rewards card so you can earn money back on purchases or use points towards things like travel or gift cards. Showing that you can pay off a balance at the end of the month boosts your credit score and shows lenders that you are a responsible borrower.

Become an Authorized User

If you’re just starting in your credit journey and have a parent willing to add you as an authorized user on a credit card account of theirs this can help you to build up your own credit. Once your name is added to the account, the payment history also becomes yours. If you’re going to go this route choose an account that has a longstanding history of positive repayments as this will help to increase your score and “credit history.” Before adding yourself as an authorized user, verify card issuer reports authorized user activity to the bureaus.  

Get a Secured Personal Loan

You might be wondering why we would suggest applying for a loan, especially if you got denied. Secured personal loans have the purpose of helping borrowers build their credit. Typically, with a secured personal loan the lender holds the funds in an account until you have repaid the loan and then that’s when the money is released. Kind of like a backward loan. What this shows is that you can repay a loan, which helps to boost and build your credit score. A credit union can be helpful when applying for a secured personal loan because of their low rates, which is super helpful when you’re just starting out.

apply for a personal loan from tropical financial credit union

Use a Co-Signer

If you’re really looking to get into a loan quick a co-signer can be a big help. Essentially what a co-signer is, is someone with strong credit history that is on the loan with you and is responsible for the loan in the event you are unable to pay it back. Typically, people use relatives as cosigners, but have the option to use anyone that agrees. If you’re approved for a loan with a co-signer this can be a huge credit builder when it comes time to apply for other things such as a mortgage, credit card or car loan.

Building credit takes time, which is why you shouldn’t be discouraged if you aren’t approved due to a thin file. With time your credit will build up to where it needs to be, but for now try out some of these tips to get your credit jumpstarted!