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mofassaa

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I'm 18, and I 've never had credit, want to start building. Where should I start?
Hello! I am 18 years old, and I've never had credit before. Now that I am older, I am realizing that I will need credit for a lot of important things in my future. However, I don't know where I should start, what I good interest rate would be for me, etc. Any help or advice would be appreciated!

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building credit

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The best thing is to do 2 things.


  1. Authorized user - if your parents have good credit and are willing, have them add you as an authorized user on a credit card account with good payment history.  This will give you their history and immediately boost your scores tremendously.  If they are leary of doing this, tell them you don't even need a card.  Explain that you are building credit and once you have obtained 2 additional cards on your own, they can remove you from their account.
  2. If they haven't such an account or are unwilling, you will likelyu need to build credit via a secured credit card.  Do a  little reaserach on the best secured cards before applying.  Some companies check credit and may even deny you even though it's a secured card.  You will have to put a minimum of $200 down and usually $300 is the standard.
  3. Once you have at least 2 accounts maintain balances below 30% of your credit limit.  Never exceed that.
  4. In 90 days you will start scoring and in 12 months you will have establish a good enough score to get unsecured cards.  
  5. You may also wish to take out a small installment loan (any loan with a set payment and set time fram.)  Conn's for example might approve you for a little $300 TV purchase or something and have a set payment of $40 for 12 months or something.  

Whatever you do... DO NOT EXCEED YOUR INCOME!  Spend less than you make.  Keep extremely minimal debt.  Put 10% of your income aside for savings every month.  Personally, I recommend giving 10% to God but that's another subject.  :-)

Sincerely,

Joe Orsak

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