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Woman reading her credit card. Woman reading her credit card.
March 13, 2023
Financial Freedom

How to Build Your Credit History


Whether you are looking to apply for a mortgage, take out a loan or start a business, having a good credit history can help you achieve your goals.



Your credit history demonstrates how dependable you will be when it comes to paying back any amount of money you borrow. Once a bank or other institution lends money, there is a chance they will never see that money again if a borrower does not pay it back. Institutions are able to lessen the risk of losing money by gauging a person’s reliability to repay based on their unique credit score.

You can build and improve your credit history by spending money in a steady and safe way. In fact, since your credit history and credit score do not consider factors like age, career or income, you can start building credit early.

Open a loan or credit card account

You can apply for a secured loan, which enables you to borrow money using collateral such as a personal vehicle, savings account or CD. Utilizing this type of loan can naturally build your credit score as you make monthly payments. Additionally, by having your own resources used as collateral, you will likely be more conscious to pay your monthly payment on time.

Opening a credit card account is also a good option to start building your credit history. Widely recognized as one of the fastest ways to build and improve a credit score, a credit card enables you to strengthen your credit each time you use your card and make scheduled payments on your monthly balance.

If you are unable to open a regular credit card account, you can try opening a secured credit card. It may be easier to receive approval for this type of account, as it requires collateral in the form of an upfront security deposit.

Another option is to ask someone you trust to be a co-signer with you on a loan or credit card. Think of it as someone vouching that you are a reliable borrower.

Keep up with how much you spend

Part of the allure of a credit card is knowing that you can buy items in person or online in an instant. By not having to use your funds at the point of purchase, it’s easy to forget how much you have spent and lose track throughout your billing cycle.

Be careful not to get carried away with spending over your credit limit or buying so much that you cannot afford your monthly credit card bill. The more you spend, the higher your monthly payment will be, and not being able to make your monthly payment could cause your credit score to go down.

Pay your bills on time

The simplest action that you can take to build credit is to pay your bills on time. Since credit scores are a measure of how reliable a borrower you are, consistently paying off debt can help you raise your credit score. The more times you do it, the less risky you are to a lending institution. Keep in mind that even one missed payment could be a red flag for a potential lender—do your best to make all your payments on time.

To learn more about credit scores and ways to strengthen your financial future, visit Trustmark’s Financial Education Tool Kit and interact with our Financial Foundations and Building Financial Capability playlists.


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