For young adults, it can be difficult to establish credit history. This
is often due to a lack of knowledge about how credit works. If you’re
planning on moving out of the family home or you’ve already done
so, you should take a few minutes to learn the basics of credit and how
you can build a sound financial future. Your first step may be a visit
to a local
credit union branch to discuss opening your own checking and savings accounts.
Becoming an Authorized User
You might not be able to take out a credit card or a car loan right away.
Having no credit history can be just as difficult to manage as having
bad credit history. One way to get started is to ask your parents or guardians if you
could become an authorized user on their credit card. As an authorized user, you could use the credit
card responsibly and pay off your purchases every month. This allows you
to “piggyback” on the primary cardholder’s good credit
to begin building your own credit history.
Getting a Secured Credit Card
Another option is to apply for a secured credit card. This is different
from a regular credit card. It requires that you pay a deposit toward
your credit limit. The deposit serves as collateral. However, because
of the recent passage of the CARD Act, your secured credit card issuer
will need proof of your income if you are under the age of 21.
Checking Your Credit Reports
Some young adults may neglect to check their credit reports regularly,
which increases the possibility that identity theft will go undetected.
You are entitled to a free copy of each of your three credit reports once
every 12 months. Scan your credit reports and make a note of any erroneous
information that could be adversely affecting your credit score.
Westmark Credit Union offers a variety of financial products for young adults, including checking
accounts, savings accounts, and car loans. At one of our credit union
branches in Idaho, you can receive financial advice, check our current
rates, and get started building your financial future. Call us at (208)