QoD: Name 1 of the ways that consumers under 25 establish credit

You can’t build a credit score out of good vibes. So how do young adults get started?

Answer:

Here’s a look at credit-building tools, and how to use them to earn a good credit score.

Questions:

Do you think it’s a good idea to try and establish credit when you are young? Why or why not?
Why do you think that credit cards tend to be the entry point for establishing credit for so many consumers?
How do you think that you will establish credit?

Here are the ready-to-go slides for this Question of the Day you can use in your classroom.

Behind the numbers (NerdWallet):

“Building credit can be tricky. If you don’t have a credit history, it’s hard to get a loan, a credit card, or even an apartment.

But how are you supposed to show a history of responsible repayment if no one will give you credit in the first place?

If your aim is to get a credit card, you could start with a secured credit card or co-signed card, or ask to be an authorized user on another person’s card.
If you want to build credit without a credit card, you might try a credit-builder loan, secured loan, or co-signed loan. There are also ways to use rent, phone, and utility payments to build credit. Some of these ways are free, others carry a fee.”

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About
the Author

Dave Martin

Dave joins NGPF with 15 years of teaching experience in math and computer science. After joining the New York City Teaching Fellows program and earning a Master’s degree in Education from Pace University, his teaching career has taken him to New York, New Jersey and a summer in the north of Ghana. Dave firmly believes that financial literacy is vital to creating well-rounded students that are prepared for a complex and highly competitive world. During what free time two young daughters will allow, Dave enjoys video games, Dungeons & Dragons, cooking, gardening, and taking naps.