How to Build Credit When You Turn 18
Building your credit will make lending institutions more likely to provide you with loans. Additionally, the higher a credit score, the more likely an individual will be offered better interest rates. A person who turns 18 will be able to start building credit and improve his credit score by doing several things over time. There are some things that will reflect negatively on a credit score, such as being late on payments, but there are also some things that can be done to improve it.
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Instructions
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Start building a credit history. A credit history is one of the main components of a credit score. You build a credit history by obtaining a credit card and making payments on time.
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Make payments on the credit card balances, keeping them well below the limit. Credit card balances that are near the limit will reflect negatively on your credit score.
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If you have any questions about your credit score and want to see your credit report, which is a good idea as you learn how to build credit, get a copy of your credit report from one of the three main credit reporting agencies--Equifax, TransUnion or Experian.
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Don't apply for too many credit cards. While one or two credit cards are necessary to build a credit history, if you have more credit cards, you can begin to appear to be a bad credit risk, resulting in a lower credit score.
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Get a car loan even if you can pay cash for a new vehicle. Automobile loans are a form of credit, but they don't reflect negatively like a new credit card. Make payments on the car loan to continue establishing a good credit history.
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Continue making payments on time. Don't be late with your payments. Not only will this reflect negatively on your credit report, it could result in an increased interest rate.
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Tips & Warnings
Be pleasant when speaking on the telephone with credit agencies. You might find someone who will be more helpful because of your pleasant demeanor.
There can be a time lag, especially if there are weekends involved, between what you do to increase your credit score and your credit score actually rising.
Resources
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