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Millennials: Use These 5 Tips To Build Credit

Millennials: Use These 5 Tips To Build Credit5/2/2017

5 Tips To Build Credit - Young woman happily holding a credit card

Millennials may say they don’t want credit or that they have no worries about credit, but in reality, everyone needs to be actively concerned with their credit and credit score.

According to a recent study, nearly 40% of millennials have credit scores of 620 or less – which is considered poor or bad credit. A low credit score is often a signal to lenders that someone may not adhere to a loan’s terms , or they are failing to make their minimum payments on time. This can cause problems when applying for a car, apartment or mortgage. Fortunately, building credit and creditworthiness isn’t as hard as it may seem! Take a look at these 5 tips to get started.

  1. Establish A Credit History

A credit history is a record of all of your credit accounts,  lenders use this information to learn about you and how you use money. For example, the number of credit cards or loans you have and payment records are listed in your credit history.

While many millennials may not be concerned with their credit history right now, it can impact larger purchases down the road. Since most lenders want to see a long track record of financial responsibility the earlier you begin building your credit history the better. Join Palisades to establish a credit history with credit cards in Rockland and Bergen County. 

  1. Pay Bills On Time

Payment history, namely the consistency of making payments on debts, comprises 35% of how your credit score is determined. Payments on everyday bills, like  utilities and credit cards, are reported to credit bureaus. You can really make this system work to your advantage by paying your bills consistently on-time. Automate bill payments if you can’t remember or aren’t punctual.

  1. Use Credit Cards (Wisely!)

Applying for a credit card is one of the easiest ways to begin building credit and credit history – but make sure you use them wisely! If you're looking for a good rewards credit card in New City, Nanuet, or Orangeburg, consider applying for a Palisades CU credit card. 

One way to use your credit card to build credit is to charge everyday purchases like gas and groceries and then make regular monthly payments. This will help create a positive credit history and build your credit score over time.

However, paying your credit card off each month may seem ideal (after all who wants to pay extra in interest) but if you are just beginning to build credit you may want to consider “carrying” a small balance each month so lenders can see you are using credit in a responsible manner.

  1. Know Your Score!

Just like you wouldn’t go shopping for a new car without knowing how much you can afford, you shouldn’t go applying for credit cards or loans without knowing what your credit score is. Knowing your score can also help you identify which areas you can work on improving – like your credit history, debt utilization ratio and more. Checking your credit report at least once a year can also help you identify errors in your report (credit companies make mistakes too!) and allow you to resolve them.

Federal law allows you to get a copy of your credit report every 12 months. Learn more and request your free copy by visiting

  1. Put Your Student Loans To Work

When it comes to student loans, it seems millennials are adopting an “out of sight, out of mind” attitude. According to one study, 37% of college grads are unaware of the interest rate on their student loans and 15% were unaware of how much they even owed. Because creditors and lenders view student loan debt just like any other debt, you want to make sure you are not skipping payments or paying late to avoid it negatively affecting your credit score.

If you are stuck with student loans and are not in the financial position to get a credit card or loan, then consider consolidating all your student loans into one loan. Oftentimes, this can help lower your interest rate and give you more flexibility in payment options. Read more about consolidating and refinancing student loans.  Read more about student loans in our guide to student loan options.  

5 tips to build credit: 1. Establish a credit history 2. Pay bills on time 3. Use credit cards responsibly 4. Know your credit score 5. Put your student loans to work

Find more tips and information by following Palisades Credit Union! Connect with us on Facebook, Twitter, Instagram or LinkedIn.

Palisades Credit Union serves members in Rockland and Bergen County.  Join online, or visit any of our locations in Orangeburg, New City, or Nanuet. 


Test your financial literacy with our Financial Literacy Quiz. 

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Buy Now Pay Later vs. Credit Cards


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