Credit building is difficult for children. It is possible. To build credit, there are some things you can do as a young person. One or two credit lines are a good start. Co-signing a loan and credit card can also be possible.
Authorized users
Not only is credit an important life skill but it can also help with your future goals. Good credit can help you get the best terms on financial products and even save you money. It requires some planning and research but will pay off in long term.
Co-signing of a loan or creditcard
While co-signing for a loan or credit card can increase your credit score and help you qualify for a lower interest rate, you need to be careful. You have to decide whether or not you can trust this person and if they are financially able to handle the obligations. Banks are not interested in your good intentions; they simply want to make sure you pay back the debt.
A cell phone plan
If you have good credit history, you may be eligible for a plan that requires low credit. There are many options. These plans are an excellent option for people who don’t wish to commit to long-term contracts. In addition, prepaid plans are usually much cheaper than a traditional plan, and you can add additional users for very little money. Major carriers often offer incentives for adding more users.
Secured Credit Card
Secured credit cards are a great way for you to build your credit history. These cards work in the same manner as regular credit cards except that you must make a deposit. Usually, this amount is equal to your credit limit. Your activity on these cards will be reported to the major credit bureaus. This can help you build your credit history. Eventually, this will help you get a regular credit card or other credit products.
Getting a debit card
A debit card is a good choice if you want to build your credit. Many banks offer a free FICO Credit Score to new customers once a billing cycle. In that you can withdraw funds from your bank accounts, the debit card is similar to a pre-paid card. The debit card has the advantage of building credit, if it is linked with an existing credit line.
Minimal payments for credit cards
Making minimum payments on credit cards can help young adults build their credit history. The options for young adults with limited income and credit histories are limited. Young adults should aim at paying off their balances every month and not having more than 30% of available credit.