Building Credit As a Young Adult

credit card

When you first move out of the house and head off to college it feels like you are finally an adult. You’re out of your parents home and making all of your own decision. But then you graduate from college and realize that you’ve only been partially living the life of an adult.

If you’re like many recent college graduates, up until now your parents were still helping you with a few things like your phone, insurance, rent and maybe even tuition. Now you have to get a big kid job, find a place to live and actually care about your credit score. Your score matters more than you may realize and whether you start off on the right foot will affect you for years to come. If you’re looking for ways to build your credit score here are a few suggestions.

Credit Cards

Credit cards have been given a bit of a bad rap, but they can actually be quite beneficial for helping you to build your score so long as you’re responsible and stay on top of your payments. There are a few different options that you have when it comes to these cards too.

  • Secured – A secure credit card requires a cash deposit so the company has collateral in case you fail to pay your bills. It is possible to find cards that don’t charge an annual fee, so do your homework.
  • Student – Student credit cards are available for students who have little credit history and experience. The only problem is they often have much higher interest rates so they need to be used responsibly.
  • Store – Store credit cards are great if you are quick to pay off your bills. You never want the cards to carry a balance for long because they usually have a high-interest rate.

Mom and Dad

Sometimes credit card companies aren’t willing to take a chance on you. This is where mommy and daddy come in to save the day if they’re willing.

  • Authorized User – If you’re an authorized user it means that the card is technically under your parents’ name, you’ve just been allowed to use it. Some companies charge an annual fee for authorized users so you’ll want to double check that.
  • Co-signer – If your parents have good credit they can co-sign with you so you can receive a loan or credit card. Basically by them co-signing they are taking partial responsibility for making sure payments are made on time.


Loans are when someone gives you money, and typically you have to pay it back within a certain time period as well as a little extra to compensate for borrowing the money. A few types of loans you might use to build your score and help with finances include:

  • Student Student loans usually don’t have terrible interest rates so they aren’t a bad way to build your credit so long as you always make sure to pay on time.
  • Auto – While it might be nice to pay cash for a car because you won’t have to pay for interest, it also won’t help you build credit. If you have the money to make payments on a car it can be a great way to build credit.
  • Personal – While a personal or peer to peer loan can help to build credit they also usually have very high interest rates.
  • Secured – A secured loan works similarly to a secured credit card where the company requires some collateral from you before they will give you the loan.


There are other ways to build your score besides just cards and loans. You can work with some companies to track payments you make to show you are a reliable person. A few things you can build your score with include:

Credit is interesting because you can get by just fine without it; however, it will come back to bite you. Some apartment complexes use companies like to check your credit score before you can rent from them. You likely won’t be able to pay cash for your first home and you’ll need a loan from the bank. The bank will want to check your score. If your score is good, then your interest rates will be lower. It is worth it to pay attention to your score now and work on building it up.

Also Read  Maintaining Independence In Later Life

You Might Also Like

No Comments

Leave a Reply