Building Good Credit: A Guide for Young People and Parents
For Brendan Classen, it was buying a car. For Aleris Rodgers, apartment hunting. As these two made the first steps into their adult financial lives, each received a crash course in the importance of good credit. Identity theft had marred Classen's credit, which he didn't find out until he applied for a car loan, while Rodgers's lack of a credit history positioned her for rejection in a competitive rental market.
Out of sight, out of mind is how most young Americans treat their credit histories. Few realize how important a favorable credit score is until they struggle to secure a loan, are slapped with high interest rates, or are even denied employment. Smart students should start building credit early, such as in college. Smart parents can begin teaching money skills far before that, even as early as elementary school. And if you're already in credit trouble? The sooner you start digging out of it, the better things will end.
Rodgers and Classen learned their lessons early. Shortly after a rental company turned her and her friends away, Rodgers got a credit card and paid it off in full each month. Classen battled with utilities and collections agencies for months and is waiting to refinance his loan's high interest rates after his name is cleared. If anything is apparent when it comes to credit, ignorance is bliss only until you need to move up and move on.