It’s probably fairly common knowledge that if you wish to acquire the finer things in life, i.e. a nice car, or a decent mortgage, you need to have a good credit score. But I don’t know how many people I’ve talked to in the banking industry who claim to meet people in their mid-to-late twenties and even beyond who just have no concept of how important credit is in this world. One of the biggest factors in a credit score is the history itself, so what age should you be looking to start?
The answer: as soon as possible.
As Rescue One Financial Branch Manager Bradley Smith says, “I have personally reviewed over 10,000 credit reports and the individuals with the highest credit scores typically have the longest credit history.”
You are legally able to get a credit card upon reaching the age of eighteen. That means that you should be looking into options before then to see which is the best for you. Some financial institutions offer student cards (Discover and Citi offer them), and these are great. Some parents and savvy students may be afraid to get into these as they present the risk of accumulating debt, but it’s precisely the type of self-control that is learned over time that is so important to becoming a responsible adult. You have to practice these things before they can become a habit, as in restraint when it comes to borrowing money when you don’t have it.
Some of these cards have high interest, but if you are paying the balance of the previous cycle off every month that does not matter. The biggest thing to remember is that history is the most important part of your credit. With long histories come great opportunities for that dream car or house, your apartment and sometimes even your job.
If you are way past the age of eighteen, not to worry, you’re reading this and you have identified that you need to get started on building a credit history. There are plenty of ways addressed in earlier posts, secured cards, authorized users, store cards. But whichever route you go, remember to always have two active revolving lines of credit (credit cards), and never let your total balance exceed 30% of what’s available to you.