Whether you are living in an urban city or a small town, your credit score and report will be attached to you for the rest of your life.
Studies have shown that millennials tend to have the lowest credit scores out of all age groups. Your credit score and report will be around for just as long as you are, so its best to start taking steps to build credit as fast as you can.
How to Build Credit as a Millennial
In many cases, some young millennials have never even checked their credit score. Thankfully, if you have a student loan you have been repaying or are an authorized user on a parents credit card, you will have some credit history.
Before you start planning how you will build credit, you should first check your credit report. Thankfully, a law requires that you get a free credit report from 3 of the major bureaus.
Even if you have no credit, now is the best time to start building!
Here tips on how millennials can build credit today!
Sign Up for a Credit Card
Getting a credit card is actually one of the most effective ways to build credit. Although you might not have any credit history, you can still apply for cards made for millennials looking to build credit.
Instead of using it to buy a 50-inch television, use your credit card for essential purchases like groceries and gas. Only use 30% of your total credit available, or else you may see a decrease in your credit score, thanks to credit utilization.
Pay in Your Name
If you are a recent grad, chances are you are living on your own or with roommates. In either situation, put all the utilities in your name. Making utility payments on time will actually help to boost your credit score.
Utility companies can report your payment history to the 3 credit bureaus, which in turn can help build credit.
Get a Loan
Loans are a great way to build credit since they touch every single one of the 5 aspects that make up your credit score. Considering buying a new car? An auto loan may be best for you.
If you have been turned down for an auto loan from conventional lenders, you may need to find a subprime auto loan. Personal loans are also ideal loans for millennials looking to build credit. Before you take out a loan, be sure that you can make the minimum monthly payments on time.
The world is a tough place, and if you are not vigilant about your credit, it can have long-term consequences. It’s always better to start now than later when it comes to your credit score. Over time, by following the tips above, you should see a dramatic rise in your score.
If you are a millennial and thinking about getting an auto loan to build credit, CrediReady can help. Our nationwide network of trusted dealers and verified lenders work with buyers in all credit situations. Take a moment to fill out our free no obligation loan inquiry form today and start shopping!