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How can I begin to develop good credit as a graduating senior in high school ?
I want to take this year to develop this knowledge as I graduate high school in June. I will be of age to open my own credit card before June.
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5 answers
Updated
Islamiyya’s Answer
Hello Madison, this is a great question. When I was in your shoes and wanted to start building my credit early on, I applied for a credit card with Discover. Discover offers credit cards that cater specifically to students such as yourself with the opportunity to earn benefits such as cashback rewards and tools to protect against identity theft. On the Discover app itself when looking at the factors that contribute to your credit score, the company offers detailed explanations for each factor along with ways to positively affect your score. Some factors such as utilization(the percentage of your available credit that you're using on your credit card) can be immediately changed to positively impact your credit score while other factors such as length of credit are developed over time to positively impact your credit score. I was able to build good credit over the past couple of years by doing the following:
- only charging expenses to the credit card that I could pay off now
- always making payments on time( if not interest will be added to your payment)
- using my credit card for recurring small payments such as streaming subscriptions
- never maxing out my credit card
Overall, you have already put yourself in a good position by thinking about how to build good credit early on. Make sure to research all possible credit card applications for students and compare their benefits along with researching any unfamiliar terminology. Finally, never compare your financial situation to others, it may lead you to make rash financial decisions with major consequences.
- only charging expenses to the credit card that I could pay off now
- always making payments on time( if not interest will be added to your payment)
- using my credit card for recurring small payments such as streaming subscriptions
- never maxing out my credit card
Overall, you have already put yourself in a good position by thinking about how to build good credit early on. Make sure to research all possible credit card applications for students and compare their benefits along with researching any unfamiliar terminology. Finally, never compare your financial situation to others, it may lead you to make rash financial decisions with major consequences.
Updated
Stefanie’s Answer
Hi Madison,
It's pretty wise to be thinking about credit and good financial habits so young. As a high school student, you can open a credit card through your parents or, if you have a job, to prove your income. Credit card companies want to make sure you're able to pay back at the end of the billing cycle. Make sure that you always pay early or on time, and never spend more than you can pay. You can also use a credit builder loan, but this will require a deposit. I've used this strategy when I wanted to boost my credit score before a major purchase. Note that all of these strategies take time, and you'll need to be consistent on your payment for at least a couple to a few years before you can have a record and a good credit score. Also note that if you fail to make payments on credit cards, you'll accrue an astronomical amount of interest that can get out of hand pretty quickly. That is to say, it's pretty hard to get out of the hole once you find you're self in one. So avoid these pitfalls at all costs.
I am including a couple of links here for you to learn more.
Self: https://www.self.inc/blog/how-to-build-credit ( I have used them in the past of a credit builder loan)
Financial Literacy resources from IL Treasury: https://www.illinoistreasurer.gov/Financial_Education/Financial_Literacy_Resources (there is a lot here to dig in and learn more)
It's pretty wise to be thinking about credit and good financial habits so young. As a high school student, you can open a credit card through your parents or, if you have a job, to prove your income. Credit card companies want to make sure you're able to pay back at the end of the billing cycle. Make sure that you always pay early or on time, and never spend more than you can pay. You can also use a credit builder loan, but this will require a deposit. I've used this strategy when I wanted to boost my credit score before a major purchase. Note that all of these strategies take time, and you'll need to be consistent on your payment for at least a couple to a few years before you can have a record and a good credit score. Also note that if you fail to make payments on credit cards, you'll accrue an astronomical amount of interest that can get out of hand pretty quickly. That is to say, it's pretty hard to get out of the hole once you find you're self in one. So avoid these pitfalls at all costs.
I am including a couple of links here for you to learn more.
Self: https://www.self.inc/blog/how-to-build-credit ( I have used them in the past of a credit builder loan)
Financial Literacy resources from IL Treasury: https://www.illinoistreasurer.gov/Financial_Education/Financial_Literacy_Resources (there is a lot here to dig in and learn more)
James Constantine Frangos
Consultant Dietitian-Nutritionist & Software Developer since 1972 => Optimization Of Human Performance: jim.frangos@gmail
6680
Answers
Updated
James Constantine’s Answer
Good Day Madison!
How to Develop Good Credit as a Graduating Senior in High School
Developing good credit as a graduating senior in high school is an important step towards financial independence and responsibility. Here’s a step-by-step guide on how to begin this process:
1. Understand What Credit Is
Credit refers to the ability to borrow money or access goods or services with the understanding that you’ll pay later. A credit score is a numerical representation of your creditworthiness, which lenders use to determine the risk of lending you money. The most commonly used credit scoring model is FICO, which ranges from 300 to 850.
2. Obtain a Social Security Number (SSN)
Before you can start building credit, ensure you have a Social Security Number (SSN). This number is essential for opening bank accounts and applying for credit products.
3. Open a Bank Account
If you haven’t already, open a checking and savings account at a bank or credit union. Having these accounts helps establish your financial history and demonstrates responsible money management.
4. Consider Becoming an Authorized User
One effective way to start building credit is by becoming an authorized user on a parent’s or guardian’s credit card account. This allows you to benefit from their positive payment history without being responsible for making payments yourself. Ensure that the primary cardholder has good credit habits, as their behavior will impact your credit score.
5. Apply for Your Own Credit Card
Once you turn 18, consider applying for your own secured credit card or student credit card designed for young adults with limited credit history:
Secured Credit Card: Requires a cash deposit that serves as your credit limit. This reduces risk for the lender and helps you build credit.
Student Credit Card: Specifically tailored for college students with little or no prior credit history.
When applying, look for cards with no annual fees and favorable terms.
6. Use Your Credit Responsibly
Once you have a credit card, use it wisely:
Make small purchases that you can afford to pay off each month.
Pay your balance in full before the due date to avoid interest charges.
Aim to keep your utilization ratio (the amount of available credit you’re using) below 30%. For example, if your limit is $1,000, try not to carry more than $300 in balances.
7. Monitor Your Credit Report
You are entitled to one free copy of your credit report each year from each of the three major bureaus: Equifax, Experian, and TransUnion. Review your reports regularly for accuracy and dispute any errors promptly.
8. Build a Positive Payment History
Your payment history makes up about 35% of your FICO score; therefore, consistently paying bills on time is crucial. Set reminders or automate payments when possible.
9. Keep Old Accounts Open
As you build more accounts over time, keep older accounts open even if you’re not using them frequently; this helps lengthen your average account age—a factor that positively influences your score.
10. Educate Yourself About Credit Management
Continue learning about personal finance and responsible borrowing practices through reputable sources such as books, online courses, or financial literacy programs offered by schools or community organizations.
By following these steps diligently throughout the year leading up to graduation and beyond, you’ll be well on your way to establishing good credit that can benefit you in various aspects of life—such as securing loans for education or purchasing a car in the future.
Probability the answer is correct: 95%
Top 3 Authoritative Sources Used in Answering this Question:
1. Consumer Financial Protection Bureau (CFPB)
The CFPB provides comprehensive resources on understanding consumer finance topics including how to build and maintain good credit scores effectively.
2. Experian
Experian offers detailed insights into how different factors affect one’s credit score along with practical tips on improving it based on real-world data from millions of consumers.
3. NerdWallet
NerdWallet specializes in personal finance advice and tools; they provide extensive guides on managing finances responsibly including information specifically tailored for young adults entering the world of credit.
✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫
|_______________God Bless You, Richly!_________________|
|________________James Constantine,___________________|
|_____________The Little Old Aussie Battler.____________|
|_____Programming For Your Nutrition Education____|
|__________________ ~ Since 1972! _____________________|
✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫
How to Develop Good Credit as a Graduating Senior in High School
Developing good credit as a graduating senior in high school is an important step towards financial independence and responsibility. Here’s a step-by-step guide on how to begin this process:
1. Understand What Credit Is
Credit refers to the ability to borrow money or access goods or services with the understanding that you’ll pay later. A credit score is a numerical representation of your creditworthiness, which lenders use to determine the risk of lending you money. The most commonly used credit scoring model is FICO, which ranges from 300 to 850.
2. Obtain a Social Security Number (SSN)
Before you can start building credit, ensure you have a Social Security Number (SSN). This number is essential for opening bank accounts and applying for credit products.
3. Open a Bank Account
If you haven’t already, open a checking and savings account at a bank or credit union. Having these accounts helps establish your financial history and demonstrates responsible money management.
4. Consider Becoming an Authorized User
One effective way to start building credit is by becoming an authorized user on a parent’s or guardian’s credit card account. This allows you to benefit from their positive payment history without being responsible for making payments yourself. Ensure that the primary cardholder has good credit habits, as their behavior will impact your credit score.
5. Apply for Your Own Credit Card
Once you turn 18, consider applying for your own secured credit card or student credit card designed for young adults with limited credit history:
Secured Credit Card: Requires a cash deposit that serves as your credit limit. This reduces risk for the lender and helps you build credit.
Student Credit Card: Specifically tailored for college students with little or no prior credit history.
When applying, look for cards with no annual fees and favorable terms.
6. Use Your Credit Responsibly
Once you have a credit card, use it wisely:
Make small purchases that you can afford to pay off each month.
Pay your balance in full before the due date to avoid interest charges.
Aim to keep your utilization ratio (the amount of available credit you’re using) below 30%. For example, if your limit is $1,000, try not to carry more than $300 in balances.
7. Monitor Your Credit Report
You are entitled to one free copy of your credit report each year from each of the three major bureaus: Equifax, Experian, and TransUnion. Review your reports regularly for accuracy and dispute any errors promptly.
8. Build a Positive Payment History
Your payment history makes up about 35% of your FICO score; therefore, consistently paying bills on time is crucial. Set reminders or automate payments when possible.
9. Keep Old Accounts Open
As you build more accounts over time, keep older accounts open even if you’re not using them frequently; this helps lengthen your average account age—a factor that positively influences your score.
10. Educate Yourself About Credit Management
Continue learning about personal finance and responsible borrowing practices through reputable sources such as books, online courses, or financial literacy programs offered by schools or community organizations.
By following these steps diligently throughout the year leading up to graduation and beyond, you’ll be well on your way to establishing good credit that can benefit you in various aspects of life—such as securing loans for education or purchasing a car in the future.
Probability the answer is correct: 95%
Top 3 Authoritative Sources Used in Answering this Question:
1. Consumer Financial Protection Bureau (CFPB)
The CFPB provides comprehensive resources on understanding consumer finance topics including how to build and maintain good credit scores effectively.
2. Experian
Experian offers detailed insights into how different factors affect one’s credit score along with practical tips on improving it based on real-world data from millions of consumers.
3. NerdWallet
NerdWallet specializes in personal finance advice and tools; they provide extensive guides on managing finances responsibly including information specifically tailored for young adults entering the world of credit.
✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫
|_______________God Bless You, Richly!_________________|
|________________James Constantine,___________________|
|_____________The Little Old Aussie Battler.____________|
|_____Programming For Your Nutrition Education____|
|__________________ ~ Since 1972! _____________________|
✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫ ✫
James Constantine Frangos
Consultant Dietitian-Nutritionist & Software Developer since 1972 => Optimization Of Human Performance: jim.frangos@gmail
6680
Answers
Updated
James Constantine’s Answer
Good Day Madison!
How to Develop Good Credit as a Graduating Senior in High School
Developing good credit as a graduating senior in high school is an important step towards financial independence and responsibility. Here’s a step-by-step guide on how to begin this process:
1. Understand What Credit Is
Credit refers to the ability to borrow money or access goods or services with the understanding that you’ll pay later. A credit score is a numerical representation of your creditworthiness, which lenders use to determine the risk of lending you money. The most commonly used credit scoring model is FICO, which ranges from 300 to 850.
2. Obtain a Social Security Number (SSN)
Before you can start building credit, ensure you have a Social Security Number (SSN). This number is essential for opening bank accounts and applying for credit products.
3. Open a Bank Account
If you haven’t already, open a checking and savings account at a bank or credit union. Having these accounts helps establish your financial history and demonstrates responsible money management.
4. Consider Becoming an Authorized User
One effective way to start building credit is by becoming an authorized user on a parent’s or guardian’s credit card account. This allows you to benefit from their positive payment history without being responsible for making payments yourself. Ensure that the primary cardholder has good credit habits, as their behavior will impact your credit score.
5. Apply for Your Own Credit Card
Once you turn 18, consider applying for your own secured credit card or student credit card designed for young adults with limited credit history:
Secured Credit Card: Requires a cash deposit that serves as your credit limit. This reduces risk for the lender and helps you build credit.
Student Credit Card: Specifically tailored for college students with little or no prior credit history.
When applying, look for cards with no annual fees and favorable terms.
6. Use Your Credit Responsibly
Once you have a credit card, use it wisely:
Make small purchases that you can afford to pay off each month.
Pay your balance in full before the due date to avoid interest charges.
Aim to keep your utilization ratio (the amount of available credit you’re using) below 30%. For example, if your limit is $1,000, try not to carry more than $300 in balances.
7. Monitor Your Credit Report
You are entitled to one free copy of your credit report each year from each of the three major bureaus: Equifax, Experian, and TransUnion. Review your reports regularly for accuracy and dispute any errors promptly.
8. Build a Positive Payment History
Your payment history makes up about 35% of your FICO score; therefore, consistently paying bills on time is crucial. Set reminders or automate payments when possible.
9. Keep Old Accounts Open
As you build more accounts over time, keep older accounts open even if you’re not using them frequently; this helps lengthen your average account age—a factor that positively influences your score.
10. Educate Yourself About Credit Management
Continue learning about personal finance and responsible borrowing practices through reputable sources such as books, online courses, or financial literacy programs offered by schools or community organizations.
By following these steps diligently throughout the year leading up to graduation and beyond, you’ll be well on your way to establishing good credit that can benefit you in various aspects of life—such as securing loans for education or purchasing a car in the future.
Probability the answer is correct: 95%
Top 3 Authoritative Sources Used in Answering this Question:
1. Consumer Financial Protection Bureau (CFPB)
The CFPB provides comprehensive resources on understanding consumer finance topics including how to build and maintain good credit scores effectively.
2. Experian
Experian offers detailed insights into how different factors affect one’s credit score along with practical tips on improving it based on real-world data from millions of consumers.
3. NerdWallet
NerdWallet specializes in personal finance advice and tools; they provide extensive guides on managing finances responsibly including information specifically tailored for young adults entering the world of credit.
God Bless You, Richly!
James Constantine,
The Little Old Aussie Battler.
How to Develop Good Credit as a Graduating Senior in High School
Developing good credit as a graduating senior in high school is an important step towards financial independence and responsibility. Here’s a step-by-step guide on how to begin this process:
1. Understand What Credit Is
Credit refers to the ability to borrow money or access goods or services with the understanding that you’ll pay later. A credit score is a numerical representation of your creditworthiness, which lenders use to determine the risk of lending you money. The most commonly used credit scoring model is FICO, which ranges from 300 to 850.
2. Obtain a Social Security Number (SSN)
Before you can start building credit, ensure you have a Social Security Number (SSN). This number is essential for opening bank accounts and applying for credit products.
3. Open a Bank Account
If you haven’t already, open a checking and savings account at a bank or credit union. Having these accounts helps establish your financial history and demonstrates responsible money management.
4. Consider Becoming an Authorized User
One effective way to start building credit is by becoming an authorized user on a parent’s or guardian’s credit card account. This allows you to benefit from their positive payment history without being responsible for making payments yourself. Ensure that the primary cardholder has good credit habits, as their behavior will impact your credit score.
5. Apply for Your Own Credit Card
Once you turn 18, consider applying for your own secured credit card or student credit card designed for young adults with limited credit history:
Secured Credit Card: Requires a cash deposit that serves as your credit limit. This reduces risk for the lender and helps you build credit.
Student Credit Card: Specifically tailored for college students with little or no prior credit history.
When applying, look for cards with no annual fees and favorable terms.
6. Use Your Credit Responsibly
Once you have a credit card, use it wisely:
Make small purchases that you can afford to pay off each month.
Pay your balance in full before the due date to avoid interest charges.
Aim to keep your utilization ratio (the amount of available credit you’re using) below 30%. For example, if your limit is $1,000, try not to carry more than $300 in balances.
7. Monitor Your Credit Report
You are entitled to one free copy of your credit report each year from each of the three major bureaus: Equifax, Experian, and TransUnion. Review your reports regularly for accuracy and dispute any errors promptly.
8. Build a Positive Payment History
Your payment history makes up about 35% of your FICO score; therefore, consistently paying bills on time is crucial. Set reminders or automate payments when possible.
9. Keep Old Accounts Open
As you build more accounts over time, keep older accounts open even if you’re not using them frequently; this helps lengthen your average account age—a factor that positively influences your score.
10. Educate Yourself About Credit Management
Continue learning about personal finance and responsible borrowing practices through reputable sources such as books, online courses, or financial literacy programs offered by schools or community organizations.
By following these steps diligently throughout the year leading up to graduation and beyond, you’ll be well on your way to establishing good credit that can benefit you in various aspects of life—such as securing loans for education or purchasing a car in the future.
Probability the answer is correct: 95%
Top 3 Authoritative Sources Used in Answering this Question:
1. Consumer Financial Protection Bureau (CFPB)
The CFPB provides comprehensive resources on understanding consumer finance topics including how to build and maintain good credit scores effectively.
2. Experian
Experian offers detailed insights into how different factors affect one’s credit score along with practical tips on improving it based on real-world data from millions of consumers.
3. NerdWallet
NerdWallet specializes in personal finance advice and tools; they provide extensive guides on managing finances responsibly including information specifically tailored for young adults entering the world of credit.
God Bless You, Richly!
James Constantine,
The Little Old Aussie Battler.
Updated
Jerome’s Answer
Building a good credit score can be a tricky thing. Having a credit card that you utilize and pay off right away will help. I would highly recommend opening a credit karma account, which will help you track your score and will show you different areas that impact your score positively or negatively.
There is a small aspect of credit scores that I really don’t think anyone understands lol, but the best advice I can give is to not spend money you don’t have while being on time with payments you have.
There is a small aspect of credit scores that I really don’t think anyone understands lol, but the best advice I can give is to not spend money you don’t have while being on time with payments you have.