• Apply for credit with a merchant you know, possibly a small business where you know the owner. Charge small amounts and pay in full at the end of each month.

• Use a co-signer. This method is especially helpful for young people who are getting credit for the first time. To help young people qualify for bank credit cards, some banks offer special agreements where parents serve as co-signers for their children. The card and account is issued in the youth's name and he or she is responsible for it. If the youth pays each bill promptly for six months to a year, the parent's name is removed and the account is put in the youth's name only. However, if the youth does not pay or proves to be irresponsible, the parent or co-signer is required to pay the bills and the poor performance is recorded in the credit report of both people. People with a poor credit rating may be required to have a co-signer before credit will be extended to them. Anyone who co-signs an agreement is legally responsible for the bill if it is not paid.

• Deposit a specific amount of money in an account at a bank or financial institution and use the account as collateral for a loan or credit card. This is called a secured credit card or loan. Make sure all payments are received on time and for the amount owed. This will establish a credit repayment record for you.

Additional Resources

http://www.nfcc.org/newsroom/newsreleases/files09/TipsRebuildingCredit.pdf