Why should you get started building credit?
Credit is a big part of our lives, from buying homes and cars to applying for jobs and getting loans. If you don’t have a long credit history when you’re ready to buy something big like a house or car, it could affect your ability to get approved for financing.
At what age can you get started?
When you turn 18, you can apply for a credit card, student loan, mortgage, or car loan. If you can get approved for such things, you can start building your credit.
Of course, building credit isn’t always easy, especially when you’re first starting out. That said, there are ways you can start building a good credit report — even while you’re still in your teens—and they’re not all as complicated as they may seem at first glance!
You may already have credit accounts.
If you’re a student, you might have taken out student loans or used a credit card to pay for books or tuition. You can also build credit by getting an apartment when you’re old enough to live on your own, even if it requires borrowing money from relatives to make it happen.
Your parents can help.
If your parents are willing, they can add you as an authorized user on any of their existing accounts. This practice allows you to build your own credit history, even if you live with them so that they can help build your credit before you turn 18 and establish your own credit score. Of course, your parents’ credit behavior then impacts your score, for better or for worse. If they are late with a payment, for example, it would cause your score, as well as theirs, to go down.
Secured cards are good for people with little or no credit history.
If you’re just starting to build credit, secured cards can be an excellent choice. These cards require you to put down a security deposit, which is typically equal to your credit limit. If you make all of your payments on time and in full each month, the card issuer may increase your limit. As long as you keep using it responsibly, this process can boost your credit score over time.
Since these accounts require you to put money down upfront in order for them to be approved, they tend to have low annual fees.
Review your credit report for errors.
As you work to establish credit, keep an eye on your credit report to make sure there are no errors. If you find any errors, contact Dovly, an AI credit engine that can help you dispute any errors you find on your credit report. Try it risk-free with our free membership tier. Get in touch with Dovly today.
