Your credit score is a three-digit number that tells lenders how trustworthy you are as a borrower and landlords how likely you are to pay your rent. The higher your score, the more likely you are to be approved for credit and to get low interest rates. Building a strong credit score after high school will serve you well in the future—when you apply for a car loan, for example, or a mortgage. Here are a few tips to get you started:
- Open a credit card account with a low credit limit. Use it sparingly, and then pay your credit card bill on time and in full.
- Apply for a credit-builder loan. Credit unions and community banks often offer these. The lender sets up a savings account for you in the amount of the loan you’ve qualified for, and you make payments toward that amount each month. Your payment history will be reported to the three national credit bureaus—and you’ll eventually have access to the savings you’ve accumulated.
- Have your rent or utility payments reported to the credit bureaus. Talk to your landlord about this and check with local utilities.