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How To Get Credit 

How to get credit

Tips to help you establish credit.

As a young adult, it can be challenging to establish credit. Many credit card companies require a credit history, making it difficult for those without one to get approved. However, building credit is essential for achieving financial goals, such as buying a car or a home, and can also impact your ability to get loans or credit in the future. Here are some tips to help you get credit as a young adult.

1. Start with a secured credit card
A secured credit card is a great option for those with no credit history. With a secured credit card, you make a deposit, which serves as collateral for your credit limit. This makes it less risky for credit card companies to approve you, even without a credit history. Use the card responsibly by making on-time payments and keeping your balances low, and you will start building a credit history.

2. Become an authorized user on a parent's credit card
Another option to build credit is to become an authorized user on a parent's credit card. Your parent can add you as an authorized user, which means you can use the card, but they are responsible for the payments. The positive payment history of that credit card will also be reflected on your credit report.

3. Apply for a credit-builder loan
Credit-builder loans are specifically designed to help individuals build credit. With this type of loan, you make payments to a financial institution, which holds the funds until you have paid off the loan. This shows lenders that you can make regular payments and manage debt responsibly, which can help build your credit score.

4. Pay your bills on time
Even if you don't have a credit card or loan, paying your bills on time can help establish credit. Utility bills, rent, and other payments can be reported to credit bureaus and help build a positive credit history.

5. Monitor your credit report
It's important to regularly monitor your credit report to ensure that all information is accurate. You can request a free credit report once a year from each of the three major credit bureaus: Equifax, Experian, and TransUnion. Reviewing your credit report can help you identify any errors or fraudulent activity, which can impact your credit score.

To summarize, establishing credit as a young adult takes time and effort, but it is essential for achieving financial goals. By starting with a secured credit card, becoming an authorized user on a parent's credit card, applying for a credit-builder loan, paying bills on time, and monitoring your credit report, you can start building a positive credit history. Remember to use credit responsibly and only borrow what you can afford to pay back to avoid falling into debt.

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This information is prepared and is made available as a courtesy. The information herein does not substitute for legal or financial advice directed to your particular situation and we do not warrant the accuracy of any statement. It is recommended that you consult with the appropriate professional for guidance and assistance. Macatawa Bank does not provide legal advice.


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