People who are trying to establish credit should take advantage of the programs offered to them. Although an authorized user is not financially liable for charges made, it does appear—on a credit report—as a piece of established credit. Since any card holder may call up his or her credit card company and request an authorized user be added to the account without a credit check, this is fairly simple to do. One important piece to keep in mind is the credit worthiness of the primary card holder. If that person has less than stellar credit, there is a good chance that his card will show up on a credit report and may actually do more harm than good. When selecting a primary card holder, select someone who has the kind of credit you'd personally want.



For those reluctant to beg, borrow, or plead with friends and family, a simple way to establish credit is to go to a chain store and open a credit card there. Most clothing and department stores require only a social security card, a drivers license, and a credit card (even if it is only your bank issued debit card sponsored by a major credit card company). The stores fill out the application for you, on a cash register and voila—you have instant credit. The interest rates for store cards are outrageous (usually 22% +); so the best way to go about establishing credit with these money pits is to purchase items in the store and then turn around and pay them off with cash, as most stores will allow this. The purchases will be reflected on reports to the credit bureaus, as will the timely payments. Good credit is now established.

The third way to establish new credit or repair good credit gone bad is to sign-up for a secured credit card. A secured credit card more closely resembles a debit card more than it actually resembles a credit card, but it does the trick. A secured credit card requires an upfront deposit and often involves a fee ($75 to $100). Cards such as these may have a $500 credit limit; however, the card holder has to deposit the $500 onto the card prior to using it. The creditors still report activity to the credit bureau, but the credit card holder has no opportunity to go wrong and cause anyone to lose money by not paying it back. It is all paid up front, but still looks like successful management of a credit card; therefore making the holder appear to be credit worthy to other lenders.

By utilizing one of these three methods, good credit is within reach and bad credit is repairable. Simply determine your own level of desperation and select the method most in line with your present state.