Depending on your level of financial knowledge and understanding it’s important to realize that your credit score will follow you for the rest of your life and is going to determine many of your financial decisions.
So, what is a credit score?
- Credit score: A numerical representation of your creditworthiness and helps determine the likelihood of you repaying borrowed money.
How does one start building credit?
- You can start building a credit score once you start using credit. This can be done by either opening a credit card or taking out a loan.
- To start applying and building credit independently you need to be at least 18 years old.
- However, you can start building credit history prior to this, you can do this by having your parents add you as an authorized user on their credit cards. (Keep in mind some card issues might not report authorized user activity to the credit card bureaus, so make sure to check that before being added)
- It’s best to start off small if you’re new to credit. Try using a small amount of your credit limit each month and pay it off. This will help improve your credit score over time.
- Another big factor is maintaining a good payment history. Make sure to pay your credit card bills on time, if you don’t it can cause your score to lower.