Learn How to Establish Credit When You’re First Starting Out

You know that establishing and maintaining a solid credit rating is vital to your future financial success. The challenging thing about credit, though, is that it often seems impossible to get credit unless you’ve already established good credit.

For young people who want to start on the right foot, beginning from scratch with no credit history can seem like an impossible task. But with the right strategies and responsible use of the tools available to you, you can establish solid credit in the early years of your adult life.

Use these strategies to get yourself off on the right foot and establish a solid credit rating, right off the bat:

1. Check your credit report. In order to know where you’re going, it’s important to first assess where you are. When you’re first starting out, your credit file is probably sparse. However, with identity theft on the rise and other credit dangers lurking, it’s important to check your credit first to make sure you are indeed starting from scratch.

• It’s also important to check your credit file as often as possible. Federal law allows you to obtain a free copy of your credit report from each of the three major credit reporting bureaus once per year.
• To continuously monitor your credit throughout the year, stagger your requests for these reports. That way, you’ll quickly be alerted if something improper has been added to your credit file. Instead of requesting all reports at once, request one from a different bureau every four months.

2. Pay your bills on time every month. One of the most important factors that influences your credit score is your history of paying your bills on time. When you pay your bills by the due date every month, in the eyes of creditors, you’re living within your means.
3. Get a recurring bill in your name. Often, students will have regular monthly bills listed in a parent’s name. However, if you get a cell phone bill or other monthly recurring bill in your name and pay it in full every month, you’ll establish yourself as a person who’s responsible in handling financial matters.