5 Ways to Build Credit as a Young Adult

Your credit score follows you through life—affecting everything from renting an apartment to buying a car to landing certain jobs. The earlier you start building credit responsibly, the stronger your financial foundation will be.

1. Open a Secured Credit Card

A secured credit card is the easiest way to start building credit with no prior history. You put down a deposit (usually $200-500) that becomes your credit limit. Use the card for small purchases—gas or a streaming subscription—and pay the balance in full each month. After 6-12 months of responsible use, you may qualify for an unsecured card.

2. Become an Authorized User

Ask a parent or trusted family member to add you as an authorized user on their credit card. Their positive payment history gets reported on your credit file too. You don't even need to use the card—just being on the account builds your credit history.

3. Take Out a Credit-Builder Loan

Many credit unions offer small credit-builder loans specifically designed for this purpose. You make payments on a small loan amount, and the money is held in a savings account until the loan is paid off. You build payment history AND savings at the same time.

4. Pay All Bills on Time

Payment history is the biggest factor in your credit score. Set up autopay for every recurring bill—credit card, phone, utilities, student loans. Even one missed payment can significantly impact your score, especially when your credit file is thin.

5. Keep Your Utilization Low

Once you have a credit card, keep your balance below 30% of your credit limit—ideally under 10%. If your limit is $500, try to keep your balance under $50. Pay it off before the statement closes for the best impact on your score.

What NOT to Do

• Don't apply for multiple cards at once—each application creates a hard inquiry.
• Don't close your first credit card, even after you get a better one—the length of credit history matters.
• Don't carry a balance to "build credit"—that's a myth that just costs you interest.

BrightStar Credit Union offers products specifically designed to help young adults build credit. Visit us to learn about your options.