How to Build Credit as a Recent Graduate
As a recent graduate, you’re likely focused on applying for college or jobs, and not thinking about your credit score. It’s a great idea to get started building credit early after you graduate so that you have a credit history when applying for a mortgage down the line, and we recommend building good financial habits from the get-go to put yourself in a good position. FirstCCU has tips to help you if you’re interested in building credit as a recent graduate.
Apply for a credit card
Using a credit card responsibly is one of the easiest ways to start building credit. If you pay your credit card bill on time each month, you’ll see your credit score go up, because you’re demonstrating to credit lenders that you can manage your debts. One thing to watch out for with a credit card is charging too many expenses to it at once and being unable to pay your bill, which can lead to steep interest charges and debt. We offer the FirstCCU Rewards Credit Card, a low interest card perfect for first time credit card holders. There is no annual fee, and you have 0% Annual Percentage Rate (APR) on credit card purchases made in the first six months!
Apply for a credit builder loan
Have you ever heard the phrase “credit builder loan”? This refers to loans that are designed to help people with little or no credit history build credit. Though you will need to have a source of income that will allow you to make the payment for the loan, this is a great way for those new to building credit to get started. An example of a loan that can help you build credit is an Auto & Recreation loan with FirstCCU. You may need a car if you’re just graduating, and a loan will help you finance it with monthly payments you can afford. You can also pay for a variety of larger purchases with a personal loan. Check out our Loan Calculator to start planning out the loan amount and monthly payment you’ll need for your vehicle.
Be aware of your credit score
Checking your credit score and reports regularly will not hurt your score and doing so will help ensure the information in your credit report is accurate. As you’re getting started building credit, we recommend that you keep a close eye on your credit score to see how it is being impacted by your activities. Keep in mind that applying for a credit card or loan will lead to a credit check from the lender, known as a hard inquiry, and this can affect your credit score. Be sure to do your research to find the best options before applying!
We’re here to help you with your finances so that you can enjoy the next stage of your life without being overwhelmed. If you have questions about our loan offerings or credit cards, please get in touch with us using the contact information listed on our website.