Establishing Credit

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My son just turned 19 and is applying for his first credit card. I've heard lots of conflicting advice about credit ratings, credit checks and how to establish a good credit rating. Does anyone have any solid advice on what a young person should do and should not do to establish and maintain a good credit rating?

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Research is key in obtaining a good credit score. In my efforts to work on my credit score, I have done a lot of research. My advice is that he use a company that allows him to monitor his credit score. The one I use allows me to see my score, all positive, and negative on my report. This will allow him to see what/where he needs to focus his attention. Also, if he uses a credit card, he will want to keep his usage of the card between ten to thirty percent of the cards max. So for example, if the card has a one hundred dollar limit, he will want to use it for small purchases. Once the thirty dollars has been hit he will want to pay the thirty dollars back.

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I got my first credit card when I was 21 years old. I wish I had known more about how credit cards work and how to better budget. If your son does not have a job yet, then I wouldn't advise he get a credit card. The biggest piece of advice I would offer is not purchase anything on a credit card that you can't pay off within 2-3 months to maintain a good credit ratio. My next piece of advice would be to pay a little more than the minimum payments on time to build credit.

To add to Kharl2310's comment, you can get a free credit report once per year from each of the three credit bureaus.

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