It’s no secret that banks and lending institutions prefer to loan money to people with an excellent credit rating. And, if you’ve had past credit problems or don’t have any credit at all it can seem impossible to get approved for a bank loan.

One of the best ways to establish credit is to choose a bank and open a savings account. If you don’t have a large amount to deposit into savings, make weekly deposits from your paycheck until you get your savings built up. Even small amounts can add up quite quickly if you make regular deposits.

Once you’ve got $1,000 in your savings account, apply for a personal bank loan. Inform the loan officer that you want to place your savings up as security toward the loan. In most cases, a lender won’t even ask what you need the loan for when they have the funds guaranteed in your savings account.

Now, you can either do one of two things. You can take that $1,000 that you borrowed and do the same thing at another bank, establishing two lines of credit history. You can also deposit it into a checking account and use it to repay the loan. But, what ever you decide to do, make sure that all the payments are paid on time and you’ll quickly have excellent credit.