Financial Firsts: building credit history

A credit card is an essential tool in helping you along your financial journey. It’s one of the most accessible ways to start building credit history and financial responsibility, whether you’re straight out of boot camp or just starting school.


Here are eight things to know about building credit:

1. Credit history may not sound important now, but when you go to lease an apartment, buy a vehicle, or start a cell phone contract, your credit history is likely to be evaluated.

2. Financial institutions look at your credit history for a variety of reasons, including:

  • Deciding whether to give you a loan
  • Determining loan terms and the repayment period
  • What your annual percentage rate (APR) will be
  • How much interest will accrue on your credit card

3. Not only do financial institutions look at your credit history, but some private sector employers gauge your financial responsibility to see if you are fiscally responsible.

4. Building credit by starting off with a credit card is a great way to capitalize on rewards for purchases you’re already making. Keep an eye out for rewards cards and match your card to your lifestyle. If you travel frequently, look for a travel rewards card that will accrue airline miles or hotel points or even a card with no foreign transaction fees.

If you’re looking for a more simple process, consider a cash back card that will offer you’re a percentage of your purchases back in cash.

5. When choosing your first credit product, pick one that you’ll stick with for the long-haul. Credit scores are partially based on the length of credit history. It’s in your best interest to hold on to the oldest card in your wallet because it will extend the length of your credit history.

6. Read the terms and conditions on your card. This contains information you need about using and paying off your card, including your APR and any fees that may apply for using the card.

7. Make payments every month, on time. This may seem like a no-brainer, but it can be costly if you forget to make a payment. The same applies for any credit product – including loans.

If you’re uneasy about whether you’ll remember to make payments, you can set up bill-pay through your financial institution and sign up for payment reminders from your credit card issuer. Just be sure you have the funds in your account each month so when the payment is pulled, you have enough available.

8. Protect your financial information by regularly looking at your credit reports. Through you get three free reports a year. Why pay for one when you can check every few months for free? Review your credit history, including the payments you’ve made. If you find any errors or inconsistencies, act immediately because your information may have been compromised and this could impact your credit score if not remedied.


If you’re ready to apply for your first card, check out our guide on how to navigate the credit card application process.