VIVA Personal Finance Blog

How do I build credit?

Updated: Aug 17

One of the most common credit-related questions we see is something like:

  • How to build credit?

  • How to build my credit?

  • How to build your credit score quickly?

  • How to establish credit?

And other similar questions. The answer is actually pretty easy - make set, on-time payments on an installment loan and diversify your credit mix. Usually the next question is either What is an installment loan? or What is a credit mix?

So let's dig into those answers, too!

Q:

​Does a good credit mix mean having a bunch of credit cards?

A:

No, but more than one credit card (with zero balances) can be good for your overall credit score!

An installment loan is just about any type of loan that requires a regular schedule of repayment within a fixed amount of time. The most common types of installment loans are personal loans, student loans, auto loans, and mortgages.

Credit mix is referring to the different types of credit available to you. So having just one credit card is a narrow credit mix, while having a credit card plus a personal loan plus a mortgage plus a car loan is a broad credit mix. Having a broader credit mix is better for your overall credit score.

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