Your Guide to Building Credit at Academy Bank

a woman checks her credit through online banking

Credit – a term that sounds intimidating and has a significant sway over our financial lives. Our choices affect our credit, and in turn, our credit affects our future choices. Whether you're a newcomer to the credit landscape or looking to improve your financial standing, this blog is your trusty companion. We are here to break down the world of credit building, how it works, and tell you why a secured credit card is your ticket to a brighter financial future.

Apply for a Credit Builder Account

What is credit?

Credit is a concept tossed around a lot in the financial arena, but let's break down the basics. At its core, credit is like a financial lifeline that lets you borrow money. In return, you promise to pay back the money down the road – usually with a little extra tagged on (that's the interest).

Now, when will you need this borrowing magic? Picture this: you want to buy something or use a service, but your wallet isn't quite ready for the splurge. Enter credit! It's a friendly IOU that helps you get whatever you need even if you don't have the cash upfront.

Credit can happen in a couple of ways. You might strike a deal directly with the person or business you're buying from. Or, you might involve a middleman, like a bank or some other money lender. These intermediaries help keep the wheels of commerce turning smoothly. To access the benefits of credit, you need to submit a request (just like asking permission to borrow). The amount you get approved for depends on your financial history – basically, how trustworthy you seem in the money world.

And here's a bonus tidbit: when folks talk about "good credit," they are giving you the nod of financial approval. It means you have a track record of handling your money matters well.

What is credit building?

In essence, “credit building” is the process of improving your creditworthiness. It is the key to boosting your financial standing, opening doors to better credit and loan opportunities. Your credit score sets the stage for your credit building journey. When your score needs a boost, you might consider exploring options like applying for a secured credit card or credit-builder loan.

Want to brush up your credit score knowledge? Check out our recent blog Building Credit and Why it Matters.

How do I build credit?

Navigating the world of credit can seem like cracking a code, especially since you need credit to establish credit. But don’t worry! We have your back! Here are some straightforward steps to building credit:

1. Secured Cards

If you are starting from scratch or facing credit challenges, consider the superhero of credit building – secured cards. These gems require an upfront deposit, acting as a safety net for lenders. Once you have proven your payment prowess, you can set your sights on upgrading to an unsecured card.

2. Make Regular Payments

Pay on time, every time. Your payment history is the biggest influence on your credit score. So at the very least, meet the minimum requirements to steer clear of penalties for missed payments. If you’re looking for a great resource to help you navigate your payments, utilize the Credit Card Payoff Calculator from Academy Bank.

3. Smart Credit Utilization

It's a delicate dance – use some credit, but not too much. Your credit utilization ratio (how much of your credit limit you're using) plays a key role in your credit score. Aim for that sweet spot and keep your credit utilization under 30%, but ideally aim for 10% or lower.

4. Keep Those Accounts Open

Think of your credit accounts as trusty companions; keep them around, especially the seasoned ones. Your credit history factors in the average account age, so even if you're not using that first credit card very much these days, consider giving it a permanent spot in your wallet.

5. Report Your Bill Payments

Your responsible bill-paying habits shouldn’t fly under the radar. Utilize third-party services to include payments for rent, utilities, or cellphone plans in your credit score, rightfully acknowledging your financial responsibility.

For additional credit-building wisdom, dive into Credit Tips – your guide to mastering the art of credit with finesse!

Build Credit at Academy Bank

Whether you are beginning your credit journey or working on credit repair, our Credit Builder Secured Visa® Credit Card is an excellent choice. This card ensures that your credit building efforts are recognized with automatic reporting to the three major credit bureaus. You also have the flexibility to customize your credit experience by setting your own limit, which can range from $300 to $3,000 (depending on the deposit into your Credit Builder Savings account).

Features included with Academy Bank’s Credit Builder Secured Visa® Credit Card:

  • No annual fee
  • No application fee
  • No over-limit fee
  • Automatic reporting to the three major credit bureaus to help you build a credit history
  • Set your own credit limit between $300 and $3,000
  • Added security of EMV chip technology
  • Faster, more secure online transactions when you enroll in Visa® Secure Remote Commerce

Today’s the day! Start building credit with a secured credit card!

Apply for a Credit Builder Account

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Subject to credit approval. Transaction and Penalty fees apply.  Credit Builder Savings account required.  $5.00 quarterly fee charged to the Credit Builder Savings account if not enrolled in eStatements. Improved credit score is not guaranteed. Credit score is determined by credit reporting agencies based on multiple factors, but satisfactory performance on a credit card product can improve your credit score. Default on a credit card, including missed or late payments can damage your credit score. Once added, funds cannot be withdrawn from the Credit Builder Savings account and the Credit Builder credit card without closing the savings account and the credit card.