Building Your Credit: Make It a Priority When You Are Young | Florida Capital Bank

Building your credit is one of those grown up activities that young adults often don’t think about. However, this is a real mistake. It is important to build your credit young. You should develop a plan for establishing a good credit rating before you really need one.


Credit and Your Credit Rating

Credit is your ability to borrow money. Many people use credit cards as a convenience so they don’t have to carry cash. But some purchases are too large, and you may want to borrow money to make the purchase rather than saving up the cash. That is why it is important to establish good credit: so you can borrow money when you need it.

In this technological age, data is kept about your financial transactions and activities. This information is used to compute your credit score. This score tells lenders how worthy you are of borrowing money. A high credit score means that you are credit worthy. Because of this, it is important to start building the foundation for a good credit rating right away.


When You Will Need Good Credit

  • You may think that you won’t need a good credit history in your 20’s. Unfortunately, this is a common misconception. Here are some reasons why it is important to pay attention to your credit at a young age:
  • You will likely want to own your own car, and you may need to take out a car loan in order to acquire a car. With good credit, you will likely qualify for a larger loan with a lower interest rate.
  • Many employers will check your credit before they hire you. If you are going to have responsibilities that require you to have access to money, poor credit may disqualify you for a job.
  • If your employer requires you to travel, he may want you to have a corporate card for your expenses. These cards are personal cards so you must have a good credit rating to qualify for a card.
  • Renting an apartment may require a credit check.
  • A good credit history will get you a better deal on your mortgage when you are ready to buy a home.
  • You may want to start a business. Your personal credit history will be relevant to securing a small business loan.


How to Build Your Credit Young

  • Get started early with your parent’s help. If you are under 21, the law now makes it very difficult to get a credit card. If your parents have good credit, you can be an authorized user on their card. Their good credit can give you a bump.
  • Get a secured credit card. You make a down payment as collateral and have a small credit limit based on your income and other factors. This is a great way to get a first credit card.
  • You could also get a credit card for a retail store. These are easy to get but have high interest rates, so be careful.
  • Use your card for small regular expenses. Be sure to pay off the balance at the end of every month.
  • Start learning about personal finance. Managing your money is an essential life skill that is often not taught in school. Books and enrichment classes will help.
  • Be responsible. A credit card is not free money. You will have to pay it back. Getting in over your head can damage your ability to get credit in the future when you may really need it.


There is no reason not to build your credit young. Establishing good credit will enable you to have more financial options and save money in the long run.