Reader Melinda writes:
Hello. I read the consumerist every day and since I turn 18 later on this month I wanted to ask how do I start a credit score or getting credit or a loan to start my credit score?
Thank you for your time.
It’s a good question, Melinda. One we’d answer if Bankrate hadn’t already done all the hard work for us. Bankrate says there are three options for your first credit card:
• Secured Credit: With secured credit you put down a deposit. If you have no credit history, this is a way to get one. Make sure not to use a shady bank, and make sure the bank is reporting your payment history. This is probably your least attractive option.
• Becoming an authorized user on your parent’s account: This can establish a payment history for you if the bank reports it. You’ll want to ask.
• Signing up with a credit card that markets to students: Credit card companies like to offer credit to students in the hopes that they’ll keep the card after they graduate.They also probably want you to spend a bunch of money. Don’t do that part.
To establish good credit, don’t apply for a ton of cards at once. Get one and establish a good payment record. Pay off your balance every month to avoid paying interest and getting yourself into debt. Credit card debt is bad. Bad. Bad. Bad.
All things considered, using a credit card wisely is an excellent way to start a credit history. Just make sure it’s a good credit history. —MEGHANN MARCO