Why Building Credit Is Crucial

CommunitySeptember 30, 2024

Having no debt is a terrific thing. But it can come at a cost if you haven’t established any credit. When Antoinette B initially made an appointment with the GLCU Foundation for Financial Empowerment to meet with Housing and Financial Counselor John Borthwick in 2020, she was debt free, but didn’t have any credit established.

John advised her to open a secured credit card to establish credit. Secured credit cards use the members’ savings as collateral so that when they use their credit card, they have the funds to pay it off, which is a nice segue into building credit.

Antoinette left the initial meeting and went home to think about it. On the one hand, she didn’t like the idea of having any debt. On the other, she needed to build credit. It wasn’t until 2023 that she returned, when her need to establish credit became more pronounced.

She had endured many issues with her landlord over the past few years, and after being unable to resolve them, she began apartment hunting. Unfortunately, all the landlords and property owners she spoke with informed her that she needed to have a credit score in the mid-600s.

John recommended she build her credit to have a stronger footing while looking for a new residence. Antoinette agreed that while she had some issues with the rental, it could wait while she built credit. John worked with Antoinette, teaching her how to research and compare product features.

Ultimately, Antoinette opted to open a GLCU Secured Visa® credit card because she trusted the credit union, appreciating the education and good service she’d received over the years.

Once she had the secured card, John helped her check on it monthly to ensure that she had been paying the balance off before the end of the month for reporting’s sake. In August 2024, John asked if she would want to look at her credit. Antoinette agreed, and when he pulled her report, she had a credit score of 728.

She was ecstatic and said that she felt like she really had so much more power with her finances and talking with landlords. She said that she looked forward to receiving more guidance from the GLCU Foundation as she decided how she wants to change her living situation moving forward.

The information in this post is for educational and informational purposes only and does not constitute investment or financial advice. You should consult a licensed financial advisor before investing in any financial product or service.

If you or someone you know is in need of free financial and housing counseling assistance, don’t hesitate to reach out and schedule a free screening.

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