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How to get your first credit account

How to establish a credit history

Having a good credit history provides many benefits. Lenders aren’t the only ones who review your credit history: Employers, insurance companies, landlords, cell phone providers, and many others may review your credit history before making any decisions that affect you.

What is the best time to get your first credit account?

Before applying for your first credit card, it’s a good idea to be sure that you’ll be able to pay the charges you make and manage your credit responsibly. This means you won’t spend more than you can afford and you’ll remember to pay your bill on time each month.

Understand the basic requirements for credit

Credit providers are governed by specific federal laws when it comes to extending credit. It can be difficult to get your first credit account if you’re under 21 and don’t have a steady income. Federal law requires anyone under the age of 21 to have verifiable income from employment to be approved for a credit. You may also choose to report child support or government income on a credit application.

Key steps to build a credit history

To build a credit history, you must first know what activities affect your credit report and score . The credit report is a record of your credit activity and how responsible you have been in paying your credit accounts over time.

Become an authorized user

Becoming an authorized user of a trusted person’s the best way to use a credit card to build credit if you are 18 years of age or older.

Consider having a co-signer or co-applicant

Apply for a loan with a co-signer or co-applicantIt may help you qualify or get better credit terms, but remember that your co-signer or co-applicant is also responsible for payment. This means that your credit history will be reflected on both of your credit reports.

Apply for a college credit card

If you’re a student, look into credit cards for college students. Some lenders offer student credit cards specifically created for students; you will need to prove that you are enrolled in the university and meet specific requirements. These student credit cards may have less demanding qualification standards and could help you build a credit history while you attend college.


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