Build Your Credit Record as a Young Adult

Follow these tips for getting your first credit card or car loan.

When you’re just starting out, you have a clean financial slate, which can be good and bad -- good because you haven’t had time to screw up but bad because lenders can’t predict whether you will. Paying student loans and being an authorized user on a parent’s credit card will help build your credit record, but they likely are not enough for you to get your own credit card or car loan.

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Try applying for a credit card through your bank or credit union or from a retailer. An American Express card may be within reach because Amex considers income and assets, among other criteria. The Blue Card offers 0% interest for 12 months and no annual fee.

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Or apply for a secured credit card. You typically deposit a sum that becomes your credit limit; after a year of on-time payments, you can usually qualify for an unsecured card. We like the Capital One Secured MasterCard, which has a $29 annual fee; a $49 deposit gets you a $200 credit limit.

If a bank turns you down for a car loan, hit the dealer’s lot. Dealers often have looser lending standards (after all, they want to sell you a car). Nissan and Hyundai, in particular, are known for being liberal in extending credit.

This article first appeared in Kiplinger's Personal Finance magazine. For more help with your personal finances and investments, please subscribe to the magazine. It might be the best investment you ever make.

Jessica L. Anderson
Associate Editor, Kiplinger's Personal Finance
Anderson has been with Kiplinger since January 2004, when she joined the staff as a reporter. Since then, she's covered the gamut of personal finance issues—from mortgages and credit to spending wisely—and she heads up Kiplinger's annual automotive rankings. She holds a BA in journalism and mass communication from the University of North Carolina at Chapel Hill. She was the 2012 president of the Washington Automotive Press Association and serves on its board of directors. In 2014, she was selected for the North American Car and Truck Of the Year jury. The awards, presented at the Detroit Auto Show, have come to be regarded as the most prestigious of their kind in the U.S. because they involve no commercial tie-ins. The jury is composed of nationally recognized journalists from across the U.S. and Canada, who are selected on the basis of audience reach, experience, expertise, product knowledge, and reputation in the automotive community.