How To Build Credit | ESTABLISHING CREDIT AT 18 YEARS OLD #Best Education Page #Online Earning

how's it going today guys so I got a

very exciting topic to talk about today

and I'm not gonna lie no it's not the

most exciting thing in the world but

it's something that you should

definitely be conscious at especially if

you're a young person and you're just

getting started out with like getting

your own bank account and get your

checking account and like thinking ahead

and that is your credit score so I want

to talk about how I personally built my

credit up as a young person and right

now I'll just say I'm 21 years old I've

had my own bank account since I was 16

got my first credit card when I was 18

and I currently have a credit score of

749 which is pretty decent for a young

guy I have four open lines of credit and

I also have an auto loan which is one of

the open lines of credit and just to

tell you why it's good to have credit

established um I have my own loan I

don't have a cosigner on there or a

co-borrower I have a loan that I took

out for $11,000 on my other car I got a

2007 Subaru Impreza WRX I bought it in

the spring of this year and I took out

an eleven thousand dollar loan for five

years for a 1.75 percent interest rate

which is quite low for somebody my age I

mean I know friends of mine who have car

loans who are paying like ten percent

interest so because I established credit

when I was younger um I was offered a

pretty awesome rate for somebody my age

in fact the bank told me that's the

lowest rate they offer so I remember

when I was going in there the lady who

did all my paperwork was kind of saying

oh you know we're probably going to have

to put you in the credit builder program

and I kind of sat there with smug look

on my face like no you're not wait till

you run my score

she ran my score she was like wow she's

like you have great credit no we're

going to be able to give you this

awesome rate so she gave me a rate of

like 1.75 percent of 5 years which I

think over the five years I'm going to

pay like five or six hundred dollars and

it interests something around there so

it's not much at all compared to ten

percent interest rate which would be

thousands of dollars so here's the

problem with your credit is uh you need

credit history to get a credit card

but at the same time you need a credit

card to build credit history so getting

your first line of credit is kind of

difficult but not impossible and I'm

gonna explain to you how to do this the

first thing you want to do when you're

16 years old and some banks will even

let you start sooner so start as soon as

you can so 16 or younger open up a

credit

I'm sorry open up a checking or or in a

savings account so you can do both you

could do just a savings account where

you just have a ATM card you withdraw

cash when you need it you put your cash

in the bank or you can also get a

checking account where you know you get

an actual debit card you can use it to

make your purchases or you can do both

keep some and savings some and checking

which is a good way to do that too but I

started that when I was 16 years old I

had to get my mom to sign on the

accounts because I was under 18 and

depending on the bank you know there's

different policies like that but what

you want to do is build a rapport with

that bank and kind of say hey you know

I'm a responsible banker

I don't overdraw my account I regularly

add money I regularly use money and you

kind of want to establish a good history

of with the bank as far as being a good

banker and then what you want to do when

you turn 18 inquire about a secured line

of credit so what that is is um you're

going to put aside money in a CD which

is a certificate of deposit which

basically backs your line of credit so

what I did is I signed up for a five

hundred dollar line of secured credit so

what I did is I took five hundred

dollars out of my savings account put it

in a certificate of deposit and that

basically backed that credit card for

the bank so they said that no matter

what happens even though I ran up a five

hundred dollar credit limit and never

paid them they could draw from that

certificate of deposit to pay for what I

owed them so no matter what they do it's

a win-win situation for them because one

they're going to get interest off you

but they're not because you're not going

to carry a balance and even if they

don't have you pay them they're going to

take it from the CD so it's like money

they can get for free from you either

way then most of them do have like a

maintenance fee or a yearly fee mine I

think was $50 a year and since then

awesome once I turned I believe 21 or it

was 20 some around there actually it was

21 on my

Earth Day they reached out to me and

said yeah we're taking off that yearly

fee and we're gonna we're going to give

you back your certificate of deposit you

don't need to back this credit card

anymore so that does go away over time

but at first it is worth it I mean you

could go to different banks and see if

there are some that offer an account

without a yearly maintenance fee but

most of them are going to charge some

kind of fee but it is worth it in the

long run to establish your credit so

once you have had a checking or savings

account with a bank for a couple years

and when you turn 18 talk to them about

a secure line of credit that's the first

thing you want to do so then what I did

is this every single week I put my gas

on the card and then I paid the entire

balance off every single month and you

want to do this for two reasons number

one you're probably going to have a high

interest rate on this credit card

because you're a high risk credit holder

so you're probably looking at like a 10

or 15 percent or higher interest rate I

think mine was like 15% interest which

even on a couple hundred bucks that adds

up over time you don't want to pay any

interest the other thing is when you

have in credit cards when you carry a

balance on your credit card it actually

lowers your credit score they want to

see you using the credit cards but

paying them off showing that you don't

actually need to carry a balance and

that's what's going to build your credit

over time it's keeping a very low or

ideally keeping no balance on your cards

but still utilizing that credit so then

what I did um I did that for about one

to two years you know bought my gas paid

it every month that gave me a buying

history and a payment history which is

what they want to see once I had about I

think I had about eighteen months of

payments I actually received in the mail

from discover a student credit card and

the only reason I applied for that line

of credit is because they said

guaranteed approval I think I started

out with a one thousand dollar line of

credit through Discover so I sent to my

application um and then they mailed my

credit card within about I think it was

about two weeks I had my credit card

there so what I did with that card

and that when I actually get cash back

no yearly fee and then there's also a

lot of other benefits with that card -

and I get like discounts at certain

stores or through I haven't really

utilized those but I have gotten a good

amount of cash back like I've had that

card for one year now and I think I have

a little over one hundred fifty dollars

in cash back just from using

for random stuff buying it here and

there so that's like free money I'll get

to use and I actually did another video

which I'll link up below that's a way to

get free money from credit card

companies by using this cashback system

so if you're interested in seeing that

video check the description so what I

did is I continue to buy gas on my

secured credit card and then with my

Discover card I buy my groceries and the

same deal pay it off every single month

that way you're not carrying any

interest and then you're getting double

payment history double buying history so

then every month I'm getting two on-time

payments which are good marks for your

credit so that's what I would do I would

suggest either doing a student credit

card if it's offered to you and if

there's no offer for a student credit

card I would go for a clothing or store

card or a gas station card because those

two are some of the easier ones to get

because they're usually a lower credit

limit and they're more geared towards

younger people who may not have a large

credit history or that great of a credit

score now you can have a great credit

score with poor buying history so

there's a couple that there's a lot that

goes into your credit score but I would

recommend looking for a student credit

card at that point or a clothing store

card or gas card now after two to three

years of doing both of these things so

maybe you're about 20 or 21 years old

now you have a secured credit card which

is hopefully going to be no longer

secured in the near future after you

turned 21 and then you also maybe have a

gas card or a store card or a student

credit card that's when I would

recommend applying for a major credit

card you know like a MasterCard or Visa

card whatever it is you know because

those cards generally have like a

minimum balance or a minimum credit

limit of $5,000 I actually just got my

first one of those the bank that I hold

my auto loan with reached out to me they

said hey you've you've had great buying

history or payment history with your car

we want to offer you a guaranteed

approval on this line of credit I said I

was running yearly fee they said nope I

said okay why not so I opened that up

and they gave me like a five thousand

dollar line of credit I haven't even

used that card yet just because I have

enough of a headache between buying and

paying those other two cards but you

know what it

another line of credit to have out there

that's kind of helping my credit you

don't want to have too many at a certain

point it gets to be too much but I mean

a couple of lines of credit is a good

thing to have and a major credit card is

good to this issue the major credit card

recognizes you as a good person to

extend the line of credit - it does

improve your credit score immensely so a

couple of other pointers I have here for

you do not apply for more than one line

of credit every six months so don't

apply for a credit card then two months

later apply for another credit card

because every time you apply for a

credit card there's a derogatory mark

put on your credit score and that does

go away I think after two years I'm not

sure how long but it will go away over

time but every time there's that hard

inquiry on your card it does have a

derogatory marking so your credit score

does lower for a period of time so do

not apply for a credit card more than

every six months we'll say that's what I

would say is the guideline and most

importantly why are you doing this why

is it important to establish credit well

here's a number of great reasons -

number one lower interest rates you're

going to get a better rate so you saw

with my example a lot of my friends are

paying ten percent interest on their

cars I'm paying one point seven five so

over five years that's thousands of

dollars I'm not paying an interest

number to a better chance of approval if

you have a better credit score if you

have buying history payment history

you're going to have a better chance of

getting approved for a line of credit or

for a loan or for whatever it may be it

gives you in the negotiating power which

is great because let's say you're going

to a dealer and you're trying to buy a

car and you know they're giving you the

runaround they're saying oh you know

this is the best price I can do you can

say look I know you can do better I have

a 750 blah blah blah credit credit score

you know I'm going to make these

payments you got to lower that price for

me I'm not a high risk buyer you know

you're going to get your money back call

your creditors up and get me a better

rate right now that's what it gives you

it gives you the negotiating power as

opposed to somebody who goes in there

and says I have no idea what my credit

score is so you know I'm not in control

the situation if you know what your

credit score is you're in the driver's

seat um easier approval process

sometimes they don't need to do

background checks co-signers

a lot of the times if you have

established credit they don't need to do

as much background information on you

like finding out Oh sometimes like to

get a credit card you got to send in

like proof of residency and stuff like

that a lot of that stuff isn't necessary

once you have a credit history um

another thing too and I actually haven't

looked into this I'm going to you can

sometimes get better car insurance rates

if you have a better credit score

because uh I'm actually not sure what

the reason is I would imagine it has to

do with the fact that responsible people

with their credit are probably more

responsible with their car insurance but

I'm definitely going to call my

insurance companies up and kind of say

hey you know I'm aware what my credit

score is can you improve my car

insurance rate

another thing that's convenient too is

you can avoid security deposits when you

have good credit in some cases like I

know with phone contracts utility

payments sometimes if you're renting a

house or renting an apartment they

require a security deposit but if you

have a good credit score they may waive

that security deposit which is nice

because then you have more of your own

money to hold on to you don't have to

set aside money as a security deposit in

case you were to go scoot off on the

rent or in case you didn't pay your

phone bill or didn't pay your utility

bill and then the last thing and this is

kind of an advantage kind of a

disadvantage I guess as long as you're

responsible it's not a disadvantage but

they will give you a larger line of

credit if you have a better credit score

so for all of these reasons guys I

highly recommend starting young and I

can't tell you how many people I've

talked to my age where I ask them what

their credit score is or like I bring it

up and like they have no idea they don't

even have credit cards they don't even

know like how you'd find out what your

credit score is and I'll tell you right

now obviously I'm not sponsored by any

of these people I'm not sponsored by

Discover or anything or these websites

I'm gonna mention but creditkarma.com

is the best way to check your credit

score in my opinion they don't sell you

on some kind of enrollment and triple

advantage which you hear on the

commercials where you end up paying 10

bucks a month for your credit score you

do not pay a thing all they do is

advertise credit cards to you and send

you the occasional junk email but they

let you check your credit card history

they let you check your credit score and

the

the thing I really like about Discover

is every month they send you your FICO

credit score and then there's there's a

number of different scores there's like

your FICO there's your TransUnion which

I'm not going to get into you can look

into those yourself because mostly I'm

actually not sure what the difference is

between those but I know the FICO score

is one a lot of people look at the

transunion credit score I think the one

that I polled think that 749 is my FICO

score but there's a number of different

scoring mechanisms out there with your

credit but I highly recommend getting

the ball rolling early because it's done

a lot for me you know it saved me

thousands of dollars in interest on my

car loan so it's something to consider

as a young person getting that credit

established because then you know at

some point you're gonna want to buy a

house at some point maybe you're gonna

want to buy a car or maybe you're gonna

want to uh you know get yourself an

apartment and you're not going to want

to pay security deposit or maybe you

want to lower your car insurance get the

ball rolling on your credit early and

don't be one of those people that has no

idea what their credit score is you know

and it kind of gives you bragging rights

in a way to when people are talking

about their credit score but having bad

credit you can say I don't have to worry

about that man I got this killer rate on

my car

I got lower insurance I got a you know I

didn't have to pay security deposit in

my apartment because I'm a responsible

buyer so I highly recommend getting

smart about your credit score so I hope

this video was helpful to you guys and

like I said I also did another video

about how to get free money from credit

card companies by utilizing that

cashback enticement system and that's in

the description so I recommend checking

that out but uh if not that's all I got

for you guys so thank you for watching

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