Consumer scores can be a pivotal aspect of your personal and financial life and building credit quickly can be tricky. It also gives a snapshot to creditors about your financial habits and abilities. Building credit takes time and attention. It is worth the effort when considering large purchases, interest rates, and investing. It is to say, the sooner you build credit the better off you will be. Here are 4 easy, cheap ways to begin building creditworthiness and preparing for the future.
Become an Authorized User
If you have a parent or spouse with a card you can ask to become an authorized user. By becoming an authorized user, the account shows on your report. This allows you to make purchases using the credit line. This can be an effective way to build a credit history. As long as the account is kept below the max amount and paid regularly it may help you build credit. This is a viable option for teens and young adults. Many parents will add their adult children as authorized users without giving them cards so that they can build credit.
Secured Credit Cards to build credit
Store cards are a great way to build history and it has a built-in safeguard since you can only use it through a certain store and the limit is typically lower than a consumer card. These types of cards are available at most retail stores and even for things like furniture or car repairs. They also often boast a 6 or 12-month interest-free period for new accounts, meaning you won't pay any extra to start building good habits and create a positive consumer history on a safe account that will be harder to overspend than a typical card.
Use a Co-Signer
Co-signers can be added onto an account or loan application and can help you reach goals and limits you wouldn't be able to reach on your application alone. By using a co-signer, you can piggyback off of a trusted one score and build credit in your name. It's important to be responsible and honest about income and ability to pay bills when using a co-signer, as this agreement shares bill pay responsibility with whomever you sign with.
This is not legal, financial or professional advice. Please consult a legal, financial or professional advisor for your specific situation.
