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How to Start Building a Credit Score While You’re Still in High School

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Think you might want to buy a car sometime soon? Interested in getting your own apartment? Considering taking out a loan? These may seem like long-term goals if you’re still in high school, but that doesn’t mean that you can’t start working towards them now. These opportunities sometimes arrive suddenly without much notice, and if you want to be in a position to embrace, you’ll need to lay the groundwork now.


Odds are that if you’re buying a car, getting an apartment, or taking out any sort of loan, you’re going to need a credit history and, preferably, a strong credit score. Although these aren’t easy to establish before you’re 18, you can certainly begin laying the foundation for a strong credit history while you’re still in high school.


To learn what factors affect your credit score, and how you can set yourself up for a successful financial foundation, keep reading.


What’s a Credit Score?

A credit score is a three-digit number attached to you that’s calculated by a fairly complicated mathematical algorithm. This algorithm is designed to assess the risk you present as a financial borrower. Essentially, it predicts the likelihood that you’ll become seriously delinquent in repaying a loan.


While there are several different agencies that create credit scores, the most common is the Fair Isaac Corporation. This corporation is responsible for the FICO score, which is generally the most widely accepted credit score. FICO scores range from 300 to 850, with higher scores representing lower risk borrowers.


Your credit score is based on different factors. Up to a third of it is calculated based on your loan payment history. This means that if you have consistently paid back loans on time in the past, you’re more likely to continue to do so. It also takes into account the amounts you owe on current loans. If you have multiple high-value loans, you are at a higher risk of being unable to pay them. The length of your credit history, how many lines of new credit you’ve taken out recently, and what types of loans you are currently repaying are also weighed into the equation.


Before you open your first credit card or take out your first loan, you essentially have no credit score, or a score of zero. Obviously this makes you a risky borrower, and as a result you will usually have higher interest rates and lower lines of credit.


Scores above 700 are generally regarded as good credit scores, while scores below 600 are usually regarded as fair to poor. The poorer the score, the less likely you are to be granted a high line of credit. In addition, if you have poor credit, you can expect to pay higher rates of interest on the credit that you are granted.


Why Should I Start Thinking About My Credit Score While I’m Still in High School?

Good credit is built over time. While you can establish a poor credit history very quickly (by, for example, taking out a loan and never making a payment on it) it takes a prolonged period to establish a good credit history. It’s almost a catch-22. You have to prove that you’re capable of paying back a loan on time before someone will give you a good interest rate on a loan. This often means that you will have to pay higher interest rates until you’ve established yourself as a strong borrower.


You should begin to think about building your credit in high school because the earlier you get started, the sooner you’ll have a strong credit score. If you want to take out a loan without a parent or co-borrower, this is a necessity. The same is true for getting approved for an apartment or other housing rental. By starting now, you’ll be ready when you actually need a strong credit score to secure a loan or housing option.


How Can I Start Building My Credit While I’m Still in High School?


1. Get a Job to Establish a Financial Foundation

You can’t pay back loans if you don’t have any money, so getting a reliable job is a good place to start. Get in the habit of saving a consistent portion of each paycheck so that you have some savings in the bank. The more money you have saved up, the better rate you’re likely to get on a loan, since you’ll be able to put some money down up front.


2. Practice Using Credit By Opening a Checking Account

Checks and debit cards are just one step short of taking on true credit and to get them, you simply need to open a checking account at a local bank. Essentially, a paper check is your word that you’re good for the money and you can only spend what you have already deposited into the bank.


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Becoming familiar with financial responsibilities like balancing a checkbook and tracking debit payments is an important first step. If you can handle a debit card responsibly, you might be able to consider a real credit card next. However, if you’re constantly overdrawing your account and getting hit with overdraft fees, you should consider waiting to get a credit card until you have a better handle on managing your finances.


3. Understand How Credit Works

Before you apply for a line of credit, be sure that you have a solid idea of how credit works. Formal lines of credit are not the same as repaying an informal loan to your parents for your prom attire or car insurance.


Essentially, when you apply for a credit card or a loan, you are granted a specific line of credit, a.k.a. a dollar amount against which you can withdraw or make charges. Your line of credit is basically the amount of money you’re allowed to borrow, and it might range from a few hundred dollars to hundreds of thousands. Usually, the higher your credit score, the higher the line of credit you can take out.   


You pay back this borrowed credit each month. If you’ve taken out a loan, there is probably a set interest rate towards which you make payments as well. Usually, most credit cards will not charge you interest if you pay off your balance on time each month. If, however, you carry a balance past that month, you can expect to pay interest on this borrowed credit. Interest rates on credit cards vary largely from almost negligible amounts to up to 25%. This is definitely something to consider, as 25% interest on even just a small amount of money can add up to a significant amount in no time, not the mention the fees you’ll be charged if you don’t make your minimum payments on time.


4. Get a Credit Card

Once you have a firm grasp on the concept of credit and you’ve established over time that you are financially responsible, you might consider getting an actual credit card. However, this isn’t entirely straightforward if you’re still in high school.


Minors are not allowed to enter binding legal contracts, which is exactly what a line of credit is. For this reason, if you’re under 18, the only way to get a credit card is to become an authorized user on a parent or other adult’s account.


Be cautious if you’re choosing this route. You will want to make sure that you only become an authorized user on an account that is handled responsibly. If you know that your dad is struggling to make payments each month, tying your credit in with his is not a good idea. His delinquent payments will be reflected on your credit history. The same is true vice versa. If you do not make payments on time, your delinquent payments will affect your co-borrower’s credit history. For this reason, we recommend that you only become an authorized user on a credit card if you are absolutely certain that both you and the adult co-signing for you will be responsible in making timely payments.


If you’re over 18, you can take out your own credit card. A good way to get started is to get a very low line of credit extended. This could be something like $200. Have a plan for what kind of charges you’ll put on your card, and try to pay off the entire balance each month. For example, only charge your gas on the card, and pay off the entire bill on time monthly. Then, as you become more familiar with the process, you can request a higher line of credit against which to borrow. Do this for a year and before you know it, you’ll have the roots of a strong credit history in place.


Building your credit may be far from the top of your priority list while you’re still in high school. Let’s face it—the deluge of classwork, extracurriculars, and standardized tests usually takes precedence over anything else. But, building credit while you’re still in high school is not just a smart idea, but an easy one too. By taking the simple steps outlined above, you’re sure to set yourself up for the financial freedom possible through achieving a strong credit score.


Looking for help navigating the road to college as a high school student? Download our free guide for 9th graders and our free guide for 10th graders. Our guides go in-depth about subjects ranging from academicschoosing coursesstandardized testsextracurricular activitiesand much more!


To learn more about financial management, check out these CollegeVine posts:


How To Start An Investment Club in High School

Borrowing For Beginners: An Introduction to Student Loans

Should I Take Out Private Student Loans?

A Beginner’s Guide to Starting Your Own Business In High School

What If My Family Can’t/Won’t Pay the Expected Family Contribution?


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Kate Sundquist
Senior Blogger

Short Bio
Kate Koch-Sundquist is a graduate of Pomona College where she studied sociology, psychology, and writing before going on to receive an M.Ed. from Lesley University. After a few forays into living abroad and afloat (sometimes at the same time), she now makes her home north of Boston where she works as a content writer and, with her husband, raises two young sons who both inspire her and challenge her on a daily basis.