Tip of the Month: Establishing Credit From Scratch

Katharine Perry in Wealth Management 29 August, 2017

We all know good credit is crucial when purchasing a home, a car, sometimes renting an apartment, and for many of life’s major decisions and moments. But, how can you establish and maintain good credit if you haven’t necessarily ever had the chance to build it in the past? We’ve pulled together some tips:

Tip #1 – Student loans

Sure, paying off student loans is not very exciting. However, establishing and building credit are some of the perks that come with student debt. When a person makes on-time student loan payments that proves they are a responsible borrower, thus building their credit. For many millennials this might be one of the first ways they can establish credit.

Tip #2 – Bills

Similar to paying down student debt, every time you make an on-time payment to your cell phone, electricity, or cable provider, you prove to lenders that you are responsible which may be considered during a credit check.

Tip #3 – Become an authorized user

If your parents have a rewards credit card they use, consider talking to them about becoming an authorized user. With your name on the account, you reap the benefits of their on-time payments.

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