How to Start Building Credit Once You Turn 18

Start Building Credit Once You Turn 18

Good credit is crucial to unlocking many financial opportunities in life. When you have a great credit score, you can get lower interest rates on car loans, credit cards, and mortgages. While developing a solid credit history takes time, follow some of these tips for how to start building credit once you turn 18 to get started as soon as possible.

1. Understand the Basics of Credit

Make sure you understand the basics of how credit works. Your credit reports are maintained by three major credit bureaus—Experian, TransUnion, and Equifax. It contains data on your current and past debts, payment history, residential history, and other facts. This data is supplied by lenders, creditors, and businesses where you have accounts.

2. Monitor Your Credit Report and Credit Score

Monitoring your credit is one of the best ways to learn what will positively or negatively impact your scores. It also helps you catch inaccuracies or signs of identity theft sooner. You can check your credit report for free annually with each major credit bureau. As you review your report, look for any negative or inaccurate information that could be screwing up your credit.

3. Sign Up for ExtraCredit

ExtraCredit does more than show you your credit scores. Have you recently started paying rent or utilities? Build It will add them as new tradelines with all three credit bureaus. That means you’ll get credit for bills you’re already paying—building your credit profile each month.

4. Become an Authorized User

If you have a friend or family member willing to add you as an authorized user on their credit card, you can piggyback off their credit card activity to help establish your credit. Even if you don’t use the card, the account can still land on your credit report and positively impact your score.

5. Get a Starter Credit Card

Credit cards are one of the best tools around for building credit, but you might have trouble qualifying for one when you have no credit history. Luckily, there are a few credit card options for young people with little or no credit.

6. Make Payments on Time

Making timely payments is the most important thing you can do to build credit, as payment history makes up 35% of your credit score. This applies to credit cards, loans, utilities such as cell phone services, and any other account that requires a monthly payment.

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