A Guide to Building Credit as a Young Adult
When you’re just starting out, whether it’s college, your first job, or moving out on your own, credit may not be the first thing on your mind. But the truth is, your credit score impacts nearly every financial step you’ll take: renting an apartment, getting a car loan, even setting up utilities. At Roswell Community Federal Credit Union, we believe that learning how to build healthy credit early sets you up for long-term financial success.
Why Credit Matters
Think of credit as your financial reputation. A good credit score shows lenders that you manage money responsibly, which means lower interest rates, better loan terms, and more financial opportunities down the road.
Smart Ways to Start Building Credit
1. Open a Checking or Savings Account
This isn’t tied directly to your credit score, but it’s a great foundation. Establishing a history with your credit union makes it easier to qualify for credit products later.
2. Consider a Starter Credit Card
A credit card, especially one from your local credit union where rates are typically lower, is a safe entry point. Start with small purchases and pay them off in full each month. This builds a positive payment history, which is the biggest factor in your credit score.
3. Try a Credit Builder Loan
RCFCU offers credit-building loans that are designed to help you establish credit safely. Instead of getting a lump sum upfront, you make small payments each month and build a record of on-time payments while also growing your savings.
4. Become an Authorized User
If a parent or trusted family member has good credit, ask if you can be added as an authorized user on their card. Their positive history helps you build yours, but make sure they practice good financial habits first.
5. Pay Bills On Time, Every Time
Late payments can hurt your credit score quickly. Setting up autopay or reminders can help ensure you never miss a due date.
Mistakes to Avoid
Overspending. It’s tempting to swipe, but high balances relative to your limit can hurt your score.
Applying for too many accounts. Every application creates a “hard inquiry,” which can lower your score if done too often.
Ignoring your credit report. Check it regularly to catch errors or suspicious activity early.
RCFCU Is Here to Help
At RCFCU, we want young adults in Roswell and surrounding communities to feel confident about their financial future. Whether it’s setting up your first account, applying for a starter card, or walking you through a credit builder loan, we’re here to guide you every step of the way.
Building credit doesn’t happen overnight, but the habits you start today will pay off for years to come.