When you are a child, it may seem difficult to start building credit. But it is possible. You can start building credit as early as you are. A minimum of one credit line is a great place to start. You can also cosign for a loan or credit card.
Authorized usership
Credit building is an essential life skill. However, it can help you get the things that you desire later in your life. A good credit score can help you save money and get the best terms possible on your financial products. It requires some planning and research but will pay off in long term.
Co-signing a loan/credit card
Although cosigning for a loan, credit card or other financial transaction can improve your credit score and allow you to qualify for lower interest rates, it is important that you are careful. You must decide if the person is trustworthy and able to pay the debts. Banks do not care about your good intentions. They just want to see you repay the debt.
You can get a phone plan
You can build your credit and get a low-credit cell phone plan. There are many options. These plans are great for those who don't want a long-term contract. Prepaid plans are often cheaper than traditional plans and allow you to add users for very low fees. Many major carriers offer incentives to add users.
How to get a secured credit card
A secured credit card can be a great way to start building your credit history. These cards can be used in the same way as regular credit cards but require a deposit. This is usually equivalent to the credit limit. These cards also report your card activity to the three major credit agencies, which can help establish your credit history. This will eventually allow you to get a regular credit line or other credit products.
Getting a debit card
A debit card is an excellent option if you're interested in improving your credit score. A majority of banks offer new customers a free FICO score once per billing cycle. The debit card functions in the same way as a prepaid card, except that you can withdraw money from your bank. It can build credit if linked to an existing credit card.
Making minimum payments on credit cards
Young adults can help build credit by making minimum credit card payments. Young adults often have limited credit history and income so the options are limited. Young adults should aim at paying off their balances every month and not having more than 30% of available credit.