How to Build a FICO Score

Building a positive credit history is important to securing loans and good interest rates. But to create a positive credit history, you need to focus on ways to build a FICO score. This includes simple actions, such as establishing a financial relationship with a bank or credit union, and keeping your credit card balances low. Because credit bureaus evaluate a variety of factors when determining your FICO score including how long you've had credit, amount of debt compared to available credit and late payment history.

Instructions

1

Open a checking or savings account at a bank or credit union. They report regularly to the credit bureaus, and this will positively boost your credit score.

2

Apply for a credit card. You bank or credit union may offer a credit card, or you can check out Bank of America--the largest credit card holder in the nation--offering more than 400 different types of credit cards. If you don't qualify for an unsecured credit card, ask about a secured card. This will require you to provide a deposit, but after several months, you should qualify for a traditional card.

3

Don't let your credit card balance exceed 30 percent of the limit available. For example, if your limit is $1,000, don't charge more than $300. Exceeding this amount can adversely affect your credit score. However, if you keep your balance low, your FICO score will climb.

4

Set up automatic payments from a checking account. Making payments on time is one of the most positive actions you can take to building a FICO score. Set up automatic payments with your financial institution to ensure you never have a late payment.

5

Ask a family member to co-sign on your loan. Just make sure they have excellent credit, because if they do, you're FICO score will benefit. The credit bureaus affiliate the person with good credit to your name, which reflects positively on your credit history.