During the pandemic, I’ve been trying to better my financial status and a big part of my research has been around credit scores. In case you’re in the same boat, below we’ve compiled a list of important must haves to build credit.

What is a credit score?

Based on a scale of 350 to 850, where above 700 is considered decent, a credit score is a number that represents your creditworthiness. The score is based on a report of files that have been reported to credit bureaus. So why is it important to have a good credit score? A credit score is looked at when you rent an apartment, buy a house or car, take out a loan, get a credit card, and many more important adult things.

What determines a credit score?

FICO and VantageScore are the two biggest companies in the industry. They base the score on two main things: payment history and credit authorization (portion of your credit limits that you actually use). Experts recommend never using over 30% of your credit availability.

Tip: make sure you pay all bills on time. If you are struggling to meet the deadlines because of your pay schedule, consider reaching out to the pending companies to get a different deadline that better aligns with your paycheck.

How to build up credit?

So how can you establish credit? There are two quick, easy ways: credit card or credit-builder loan.

Credit card: If you are starting from scratch, getting a secured credit card is the best way to go. Backed by an upfront cash deposit, a secured card gives you a credit limit that is already on the card. For example, if you deposit $500 on the card, you can use $500 and not more. The cool thing is, you get to use the card like a credit card and a debit card. You can buy things, make payments and never go over the amount that’s on the card. The point is to have a secured card to build up enough credit to qualify for an unsecured card (one without a deposit).

Tip: select a card with no annual fee.

Credit-builder loan: In essence, a credit-builder loan is a forced savings program where payments are reported to credit bureaus.

Authorized user: Another way to build credit is to become an authorized user on a family member or significant other’s credit card. This can be a really great option as you will be looked at as one person so if the person you’re tagging onto has a good history of paying on time, it will make you look good.