Having good credit is important to reach future financial goals. But what is good credit and how do you get there?

Good credit is essential for achieving financial goals like getting a loan for a house or car at the best interest rates. Lenders rely heavily on credit scores to determine the risk of lending money to a borrower. Think of them as the GPA of your financial life - the higher your credit score, the better the loan terms and interest rates you can qualify for.

Your credit score isn't just a number; it reflects your financial behavior and trustworthiness. It's the first thing lenders look at when deciding whether or not to offer you financial products and often determines how much you'll pay. For example, excellent credit can save hundreds of thousands of dollars in interest on a typical 30-year mortgage. On the flip side, starting with no credit history can make it challenging to get a loan or line of credit when needed.

Credit scores aren't used just for loans:

• Renting an apartment is frequently contingent on a decent credit score.
• Employers often use credit scores and reports when making hiring decisions.
• Depending on your state, insurance companies may consider your score when setting policy rates.
• Utilities and cell phone providers often check your credit as a condition of signing up.

Given the importance of good credit, establishing and building a credit score should be a priority for anyone without a score. Credit isn't just about borrowing and repaying. It's a testament to your ability to manage financial commitments. Without a credit history, lenders, landlords, employers, plus more will lack evidence of your financial reliability.

Tips for Building Credit from No Credit History

If you have no credit file and score, you may feel stuck in a catch-22. How do you build credit without already having credit? Here are some strategies to kickstart your credit history:

• Apply for a secured credit card that reports to the major credit bureaus. Charge small amounts monthly and always pay off the balance in full by the due date to demonstrate your responsibility.
• Become an authorized user on a family member or partner's well-managed credit card account. Their positive history will start to factor into your score over time.
• Explore credit-builder loans that report payments.
• Consider having someone with excellent credit co-sign for an installment loan or credit card.
• Sign up for phone and utility services. Making on-time reoccurring payments gets reported to bureaus.
• Avoid payday loans or other expensive financing options. Not only are the fees high, but payments aren't typically reported to the credit reporting agencies.
• Check your reports and dispute any errors or fraudulent accounts. Mistakes can unfairly drag down credit scores. You can use the AnnualCreditReport.com website to review your free credit report.

At PFCU we have certified Financial Coaches to support your financial needs, including understanding and building your credit. To set up an appointment today, use Live Chat Support, email pfcuinfo@pfcu4me.com or call 844-517-3611.