Get a Job
OK, so getting a job doesn’t directly help you establish credit, but income is a key factor in qualifying for credit, and your job history, just like your credit history usually gets stronger with time. The more experience you have, the better your chances of getting a better, higher-paying job in the future, so get started early (without hurting your academics, of course).
The CARD Act of 2009 requires students and other young adults to demonstrate their ability to repay debt before they can open a credit card account. Having a job will help you do exactly that and strengthens your qualifications for getting a credit card when you’re old enough.
Get Added as an Authorized User
When you’re under 18, one of your options is to get an adult to add you as an authorized user on one of their credit cards. As an authorized user, you can hold and/or use the adult’s credit card, but you won’t be the primary cardholder. The primary card user’s responsible card use can help boost your credit.
“As an authorized user would be able to piggyback off of the more responsible person’s credit,” says Amber Berry, Certified Financial Education Instructor at Feel Good Finances. “Of course, this requires consent from the sponsoring adult because it is the card owner, not the authorized user who is ultimately responsible for making payments.”
This is only a good idea if you and the cardholder both trust each other to use or pay on the card responsibly. You’ll also want to make sure the card in question reports authorized users to the three major credit bureaus.
Get a Secured Credit Card
If you’re already 18, another option for establishing a credit history from scratch is getting a secured credit card. Secured credit cards require a security deposit that dictates your line of credit for instance, a security deposit of $300 would get you a $300 credit limit. Even though your card is tied to hard cash, you still use it for purchases and make monthly payments just like a normal credit card.
It’s much easier to qualify for a secured credit card, and responsible use will still help you build credit. Card providers may even raise your credit limit or offer you an unsecured credit card after a period of responsible use.
Get a Student Credit Card
If you’re heading to college soon, another good starter option is the student credit card. Student credit cards have more lenient qualification requirements, have low or nonexistent annual fees and often offer incentives for responsible behavior. For instance, the Discover it Student chrome offers cash back for good grades, 2% cash back at gas stations and restaurants on up to $1,000 in purchases per quarter and a cash back match at the end of the first year.
Use Good Credit Card Habits
When you do land a credit card, long-term responsible use is necessary to build and maintain your good credit. That includes paying your bills on time, carrying a low balance and paying your balance in full.