4 Tips to Start Building Credit in High School

4 minute read

How to Start Building Credit Before College

As a busy high school student focused on classes, friends, and college applications, thinking about "credit" might not be a priority. You may have seen credit card ads and wondered if you need to start building credit history. Establishing good credit early can offer significant benefits later in life.

What Is Credit?

Credit is fundamentally a system of financial trust, measuring your responsibility with borrowed money. When you apply for a loan, sign a cellphone contract, or rent an apartment, lenders and landlords assess your reliability in paying bills. This assessment often relies on your credit score.

A credit score is a three-digit numerical representation of your credit behavior, typically ranging from 300 to 850. Higher scores indicate greater creditworthiness. These scores are calculated using factors from your credit report, including:

• Your payment history (on-time versus late payments)
• The total amount of unpaid debt you carry
• The types of debt you have
• The length of your credit history

Having good credit offers more than just convenience; it helps secure your financial future and save money. A high score can lead to lower interest rates on loans, better credit card offers, easier housing access, and even lower insurance premiums. A low score, conversely, can make it harder to qualify for necessary loans or cost you more in higher interest rates.

Why Should High School Students Start Building Credit?

Contrary to popular belief, you are not simply assigned a credit score when you turn 18. Credit scores are based on your credit report. If you haven’t taken steps to establish a credit history, you won't have a report.

A strong credit history makes it easier to secure loans and credit cards with favorable terms when you graduate and begin college. Furthermore, most landlords and some employers check credit reports as part of their screening process, so a positive history can help you secure the apartment you want or land a good job.

What Can I Do to Begin Establishing Credit?

It’s easier than you might think to start building a credit history. Here are some tips to get you started:

• Become an Authorized User: One of the easiest ways is to become an authorized user on a parent or guardian’s credit card. This allows you to leverage their established good credit history, which can positively impact your own credit score.
• Open a Secured Credit Card: Some banks and credit unions offer secured credit cards designed for individuals with little or no credit history. You provide a security deposit as collateral. As you use the card responsibly, your payment history is reported to credit bureaus, helping you build credit.
• Pay Your Bills on Time: Even without a credit card, you likely have bills (cellphone, streaming services, etc.). Paying these by the due date demonstrates responsible financial behavior. Late payments negatively impact your score.
• Learn About Credit: Take time to understand how credit works and the importance of managing it wisely. The NC Assist Financial Wellness Center provides free courses, tools, and resources.

Another smart financial habit is saving money. While saving doesn't directly build credit, it helps you become more responsible with your finances and reduces reliance on credit in emergencies.

Do I Need Good Credit to Get a Student Loan?

College financing comes in many forms, and many students need loans to pay for higher education. Having good credit can make the student loan process smoother. Most federal student loans are based on financial need and do not require a credit check or a co-signer.

Private or alternative student loans, however, typically do require a credit check. If you don’t have an established credit history, you’ll need a co-signer with good credit (usually a parent or guardian) to guarantee repayment of your loan.

NC Assist is a private, non-profit loan offered by College Foundation, Inc., a trusted North Carolina non-profit lender. This program provides competitive fixed-rate loans to North Carolina residents and out-of-state students attending eligible North Carolina schools.