Did you know that building credit from a young age is one of the smartest financial moves you can make? Many people don’t realize the importance of credit until they’re faced with buying their first car, renting their first apartment, or even applying for a job. Getting a handle on your credit early can make navigating these “firsts” a whole lot easier.

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What is Credit? And Why Does it Matter?

Think of credit as your financial reputation. It’s a record of how well you handle borrowed money, like credit cards and loans. Lenders, landlords, and even some employers look at your credit history to see if you’re reliable. A good credit score can help save you money, while a bad one can make borrowing more expensive and limit your options.

Benefits of Building Credit Early

Starting to build credit early comes with some pretty nice perks, including:

• Lower Interest Rates: A good credit score can help you secure loans and credit cards with lower interest rates, saving you money in the long run.
• Higher Credit Limits: Lenders are more likely to give you higher credit limits if you have a solid credit history.
• Better Rental Opportunities: Many landlords check credit scores when you apply for an apartment. A good score can make it easier to get the place you want.
• Job Prospects: Did you know some employers check credit reports as part of the hiring process? It’s true. Especially for jobs that involve handling money.

How Young People Can Start Building Credit

Ok, so now that you know how important credit is, how do you start building it? Here’s a few easy steps you can start now:

• Become an Authorized User: Ask a family member with good credit to add you as an authorized user on their credit card. This helps you build credit without having your own card.
• Get a Share Secured Loan: A Share Secured Loan lets you borrow money with a fixed rate and payment, using the balance in your savings account as collateral.
• Pay Bills on Time: Always pay your bills on time. This is one of the biggest factors in building a good credit score. Getting a checking account and setting up Online Banking (with account alerts, Online Bill Pay and more!) can help guarantee those bills get paid, even if they slip your mind.
• Educate Yourself: Taking the time to learn good financial habits can help you on your path towards financial responsibility. Products like our High-Yield Edge Debit account helps teach financial independence and can help you earn more while you learn!

Start Building Today

The sooner you start building credit, the better. Good credit habits now can set you up for financial success later. Remember, building credit is a marathon, not a sprint. Be patient, stay disciplined, and watch your credit score grow.

By understanding the importance of credit and taking steps to build it, you can set yourself up for a bright financial future!

Pro-tip for the future: If you’re over 18 and you have a loan with us, you can view your FICO^® Score for free in online banking (or our mobile app) and watch your credit score grow! Learn more.

Have specific questions about your credit situation? Contact us today! We’re happy to help.