Credit Score Secrets: How to Start Building your Credit at a Young Age

Credit Score Secrets:How to Start Buildingyour Credit at aYoung AgeBLOWNMORTGAGE.COM

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In today’s day and age of tough credit restrictions, it mightseem like you will never own your own home. The goodnews is that if you start now, even if you are in your lateteens, you will have a better chance at getting approved fora home when you are ready, rather than if you wait untilyou are an adult to start building your credit. Too manycollege students wait until they are out of college to startbuilding their financial life – at that point it could be too late,making it very difficult for you to obtain a mortgage.Instead, here are a few tips to get you started now.



When you turn 18 years old you are able to apply for afew loans. This does not mean that on your 18th birthdaythat you should throw yourself into debt, but it does meanthat you should get your credit file started as early as youcan. You can look for secured personal loans or adepartment store credit card, which are usually theeasiest to obtain without a credit history. The credit linethat you will be granted will be rather small, but it is agreat way to get your credit history started.

Start your Credit History

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Become an Authorized UserIf it is not possible for you to get approved for a credit cardor other type of financing due to a low income, your youngage or lack of credit history, ask your parents to put you ontheir card as an authorized user, if they are willing. Thisallows you to start your credit history without being liablefor a bill in the eyes of the credit card company. Thepayments and history will still be reported on your creditreport, giving you the jump that you need to obtain yourown card. Not every credit card company reportsauthorized users to the credit bureaus, though, so it paysto check with the individual company to see if it will helpyour case. Authorized User



Use your Credit Cards

Once you are able to get a credit card or two, use them.This is the best way to build up your credit score. Whenyou use them though, it needs to be responsibly. Thismeans not maxing out your credit line; it means simplycharging a small fraction of the amount that is available toyou and then paying it off in a timely manner. If you canpay it all off at once your credit score will react favorably.If you cannot pay it all at once, pay as much as you can inorder to get the balance down fast. You should continuethis practice regularly in order to keep your credit scoreup.



Apply for more Credit Cards

As your credit history builds up, continue to apply formore credit, whether credit cards or other securedloans. This will keep your credit file active and allowyour score to reflect your responsibility with money.As you continue to use your cards remember towatch your balances, never letting them get too closeto the credit limit.



The longer that you are able to go through these steps,the higher that your credit score will be when you areready to purchase a home. The thicker that your creditfile is the more likely it is that you will have options whenyou are applying for a loan program. The FHA loanprogram is a great mortgage for a first-time home buyer,but if you have good credit and more than 5 percent toput down on a home, you might even qualify for aconventional loan, allowing you to avoid paying FHAinsurance fees and giving you the advantage of lowrates and fewer closing costs.



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C L I C K H E R E



Justin McHood is Americas MortgageCommentator and has been providingMortgage commentary for over 10 years.

INFORMATION PROVIDED BY: JUSTIN MCHOOD

MORTGAGE COMMENTATOR

Information Originally Published: February 1, 2015BLOWNMORTGAGE.COM


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Credit Score Secrets: How to Start Building your Credit at a Young Age

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Transcript of Credit Score Secrets: How to Start Building your Credit at a Young Age