5 Savvy Ways to Build Your Credit at a Young Age

Graduating from high school and heading off to college for the first time can be an exhilarating experience, with new friends, opportunities, and lots of personal freedom.

As you’ll quickly discover, however, the financial realities of the adult world are a little more challenging than you might have expected, especially if you’re a newcomer to the world of personal credit.

Your ability to rent your own place, buy a car, or get a credit card without the help of your parents (or an adult co-signer) is one of our first financial challenges, but there are some smart ways to begin to build your credit, even in your late teens.

Open a Secured Credit Card Account

While it’s a little ironic that you need credit to get credit, a good place to start is a secured credit card. By placing a deposit of as little as $200 with a bank or a card company, you’ll get a Visa or Mastercard account that you can use for restaurant meals, online shopping and more. Most cards will report the good news if you make monthly payments on time, helping to build your credit score.

Move on to Traditional Credit Cards

If you’re showing good progress on making timely payments on a secured card, banks will often offer you a “real” credit card, though you’ll likely have a low credit limit or a high monthly interest rate for any balances. Still, you’ve have to start somewhere, and even a low-limit card will report your timely payments and usage to the credit bureaus, gradually establishing you as a reliable consumer.

Get Utilities or Phone Service in Your Name

Renting your first apartment or finally getting out of that family plan on the cell phone? You may need a healthy deposit for electrical service or a service plan in your own name, but doing so and paying the bills on a regular basis can help build your credit power.

Get Some Help from the Parents

If you’re still too credit-shy to qualify for your own credit card, having a parent or family member adding you to their account through authorized usership is also a way to help establish your own credit status. Piggybacking on a better-established adult’s credit rating and their payment history is a great way to start building your own credit – just remember to use the card responsibly, of course.

Pay Your Bills on Time

We can’t stress it enough – the most critical credit-building strategy for a young consumer is paying those bills on a regular basis. Timely payments are one of the major factors used to determine a person’s credit score, so set up automatic payments or use your credit card’s online payment system to keep on top of your bills. The results will show, faster than you can imagine.

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