Good Ways to Build Credit
Building credit early sets the foundation for future financial opportunities, including lower interest rates on loans, better rental applications, and even job prospects. But where do you start? Here are four effective ways young people can build and maintain a strong credit profile.
1. Get the Right Credit Card
A credit card is one of the easiest ways to start building credit—if used responsibly. Here are two good options for beginners:
- Low-Rate Credit Card – With a low rate and no annual fee, Cornerstone's Visa® Platinum is a great card for young adults.
- Secured Visa® Credit Card – Cornertone also offer a Secured Visa®, which requires a refundable deposit as collateral, making it a low-risk option to build credit.
💡 Tip: Always pay at least the minimum due, but ideally, pay off the full balance every month to avoid interest.
2. Keep Credit Utilization Low
Your credit utilization ratio—the amount of credit you use compared to your total limit—plays a major role in your credit score. A general rule of thumb:
- Keep utilization below 30% to maintain a good score.
- Aim for 10% or lower for the best results.
For example, if your credit limit is $1,000, try to keep your balance below $300 at any given time.
💡 Tip: If you have a small credit limit, make small purchases and pay them off multiple times a month to keep utilization low.
3. Pay Bills That Report to Credit Bureaus
Not all bills help build credit, but some services report on-time payments to credit bureaus:
- Rent Payments – Some landlords and services like Experian Boost can report rental history.
- Utility Bills – Phone, water, and electricity bills may count toward your credit if you enroll in a reporting service.
- Streaming Subscriptions – Select services like Netflix and Hulu can now be included in credit-building programs.
💡 Tip: Always pay bills on time. Even one late payment can damage your credit score significantly.
We're in Your Corner
Building credit takes time, but starting early and making smart financial moves can set you up for success. Focus on responsible credit use, on-time payments, and keeping balances low. With these habits, you’ll establish a solid credit history that benefits you for years to come.
Do you have any questions about credit-building strategies? Reach out to a team member to get started on your credit journey!
