How to Build Credit (and Why It Matters)

Building credit in America often feels like a catch-22: you need credit to get a credit card, but you need a credit card to build credit. For many immigrants and newcomers to the U.S. financial system, figuring out how to build credit can be overwhelming. The good news? There are proven ways to start building credit, even if you're starting from zero.

Understanding Your Credit Score

Your credit score isn't just a number – it's the key to your financial future in the United States. A good credit score (typically above 700) can unlock better opportunities¹.

• Lower interest rates on loans
• Better apartment rental approvals
• Reduced insurance rates
• Access to premium credit cards
• Better terms on car loans
• Future mortgage qualification

How to Get a Credit Card When Building Credit

Many people wonder how to get a credit card with no credit history. Here are the most effective options:

Secured Credit Cards A secured credit card is often the easiest way to start building credit. You put down a security deposit (usually $200-$2,500) that becomes your credit limit. This deposit makes it easier to get approved while building credit safely. The Pomelo Secured Mastercard offers this ability. Sign up for an account and start building your credit with Pomelo.  

Credit Builder Cards These cards are specifically designed for people building credit from scratch. They often have:

• No credit check required
• Regular reporting to credit bureaus
• Clear paths to credit limit increases
• Tools to help build credit responsibly

Become an Authorized User Another way to start building credit is to become an authorized user on someone else's credit card. Their payment history can help boost your credit score, but make sure they have good credit habits!

Tips for Building Credit and Maintaining a Good Credit Score

Building credit takes time, but these habits will help you build and maintain a strong credit score:

• Make all payments on time (35% of your credit score)
• Keep credit utilization low (30% of your score)
• Maintain older accounts (15% of your score)
• Mix different types of credit (10%)
• Be selective with new credit applications (10%)

Building Credit Through Regular Activities

Here's a lesser-known strategy for building credit: turn activities you're already doing into credit-building opportunities. For example, sending money to family abroad can now help build your credit score with the right tools.

That's why we created the Pomelo Mastercard®. It helps you build credit through regular money transfers – something many of our customers already do monthly. Every on-time payment helps build your credit history, and we report to all three major credit bureaus: TransUnion, Equifax, and Experian.

Start Building Credit Today

Building credit is a journey that starts with a single step. Whether you choose a secured card, a credit builder card like the Pomelo Mastercard®, or another method, the most important thing is to begin building credit now.

Ready to start building your credit score? Sign up with Pomelo today and turn your regular money transfers into a path to better credit. Not only will you build credit with every on-time payment, but you'll also earn points on every transfer – making your credit-building journey more rewarding.

Remember, a good credit score opens doors to your future in America. The sooner you start building credit, the more opportunities you'll have to achieve your financial goals.

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Helpful Resources

• Pomelo's Credit Building Guide
• https://www.consumerfinance.gov/ask-cfpb/how-do-i-get-and-keep-a-good-credit-score-en-318/
• https://www.cnbc.com/select/advantages-of-a-good-credit-score/
• Annual Credit Report (free credit reports)

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