How to Build Credit to Get a Car?

You can build the credit needed to buy a car by showing increasing levels of responsibility as you open new credit accounts with banks, department stores, gas stations and other merchants. Paying your bills on time will be important as you show potential creditors that you are ready for an automobile loan.

Instructions

1

Apply for a department store credit card. Department stores generally charge higher interest rates than banks, but their cards are often easier to obtain. That makes them attractive for people establishing credit for the first time. You can apply for department store cards in the store, online, and sometimes over the telephone.

2

Start using your department store card, or apply to another store if you were initially turned down. Keep applying until you are successful, but avoid making many applications over a short period. That could suggest that you are desperate for credit and might your credit score to drop.

3

Make consistent on-time payments to your department store credit card. Apply for a second department store or similar card after about six months. Start using it and make payments on time.

4

Apply for a full-featured bank credit card such as a MasterCard or Visa. Your successful management of department store cards should make you a good candidate for the bank card. Begin using the MasterCard or Visa, and make every payment on time. You can get applications from your bank or online.

5

Apply for a secured credit card if your initial applications for a bank card are turned down. For a secured card, you must place money in a bank account and allow it to be held as collateral. That eliminates the risk for banks, making the cards easy to obtain.

Apply for a second credit bank credit card after several months, and also use it while making on-time payments. After a year or so of responsibly using bank cards and department store cards, you should have the credit needed for a car loan.