How-to-Guide: Building Credit for Gen Z—A Real-World Guide to Getting Started
For many Gen Z-ers, building credit can feel like one of those “adulting” tasks that you should be doing, but for many, no one really explains how crucial credit is for your financial future! Whether you're dreaming of renting your first apartment, or just want to be ready for whatever comes next, your credit score plays a big role. Here’s a simple, straight-to-it guide to help you start building credit the smart way!
First, Why Does Credit Matter?
Your credit score is like your financial reputation. Lenders use it to decide how trustworthy you are with borrowed money. A higher score = better chances of getting approved for loans, credit cards, or even renting an apartment—with better rates and terms if approved.
Step-by-Step: How to Start Building Credit
1. Start with a Secured Credit Card: If you’re brand new to credit, a secured credit card is a great first step.
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Secured credit cards require a small deposit that stays frozen in your account (usually $200–$500), which acts as your credit limit.
Tip: Use it for one or two small monthly purchases (like gas or a streaming service), and pay it off in full each month.
2. Become an Authorized User: Ask a trusted family member or friend if you can be added as an authorized user on their credit card.
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Their good payment history could help boost your credit—without you needing to qualify for a card.
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You don’t even have to use the card yourself to benefit.
Warning: Make sure the account is in good standing—late payments can hurt your credit too.
3. Use Credit Responsibly (AKA Don’t Go Wild): Here’s the rule: use less than 30% of your credit limit at any given time.
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Example: If your card has a $500 limit, aim to carry a balance of $150 or less at any point.
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Then, pay it off in full by the due date to avoid interest.
Tip: Set up auto-pay so you never miss a payment.
4. Make On-Time Payments a Habit: Your payment history makes up 35% of your credit score—so paying on time is everything.
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Pay at least the minimum payment by the due date, but try to pay it off in full to avoid interest.
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Late payments can stay on your report for up to 7 years. Don’t let one mistake cost you long-term.
5. Check Your Credit Report Regularly: You can get a free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) at AnnualCreditReport.com.
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Check for errors or suspicious activity.
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See what’s affecting your score and how you can improve.
Tip: Use the ‘Credit Score’ tool in your CSE mobile app or online banking to keep tabs on your score!
How to Level Up:
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Get a credit-builder loan—it’s designed to help you build credit.
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Link your rent or utility payments to your credit report through services like Experian Boost or Rental Kharma.
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Avoid opening too many accounts at once—too many credit inquiries can lower your score.
Building credit takes time, but starting early (and smart) gives you a major advantage. It’s not about how much money you have—it’s about how responsibly you use what you’ve got. Stay consistent, keep learning, and remember: building good credit is one of the best investments you can make in your future self.
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