Establishing good credit early in life can set you up for long-term financial success. Whether you’re saving for a car, thinking about your first apartment, or planning to buy a home in the future, your credit score plays a major role in your financial opportunities.
At Legacy National Bank, we believe financial education is the foundation of a strong future. Here are some of the best ways young adults can start building credit wisely and confidently.
1. Open a Starter Credit Card
If you’re new to credit, a starter or “secured” credit card is a great first step. With a secured card, you provide a cash deposit that acts as your credit limit. It’s a low-risk way to show lenders you can manage debt responsibly.
Tip: Only charge what you can afford to pay off in full each month to avoid interest and build a positive payment history.
2. Become an Authorized User
Ask a trusted family member if you can be added as an authorized user on their existing credit card. As long as the account is in good standing, their responsible credit habits can help boost your credit score without you needing to apply for a card yourself.
3. Make On-Time Payments, Always
Payment history is the most important factor in your credit score. Even one missed or late payment can hurt your score and stay on your record for years. Set up reminders or automatic payments to stay on track.
4. Keep Your Balances Low
Try to use less than 30% of your available credit limit. This shows lenders that you’re not relying too heavily on credit and are managing it well. For example, if you have a $1,000 limit, aim to keep your balance below $300.
5. Use Credit Regularly, But Responsibly
Avoid opening too many accounts too quickly, but do use your card consistently. A small monthly charge (like a streaming service or gas fill-up) that you pay off regularly helps establish a steady, positive credit history.
6. Consider a Credit-Builder Loan
Some banks, including Legacy National Bank, offer credit-builder loans designed specifically for young adults looking to build or repair their credit. With this type of loan, your payments are reported to credit bureaus, helping you build history while saving money.
7. Monitor Your Credit Report
You’re entitled to a free credit report each year from all three major bureaus. Regularly checking your report helps you understand where you stand, catch errors, and stay on top of your financial health.
Build Your Credit with Confidence
At Legacy National Bank, we’re here to support you through every financial milestone — including your first steps toward building credit. Our team is happy to help you choose the right tools and understand how to use them effectively.
Stop by any of our convenient Northwest Arkansas locations or visit us online at legacybank.com to get started.
Let’s build your legacy, together.