When you're starting out, there are many ways to build your credit. Find out how to establish your credit history the right way.

At i-bank, we understand that embarking on your financial journey is an exhilarating experience. You're brimming with aspirations - perhaps eyeing that sleek new car or dreaming of your first home. However, there's a crucial element that can make or break these dreams: your credit score.

This pivotal number isn't just a random figure; it's a powerful force that shapes your daily life. It influences everything from the security deposit on your apartment or phone contract to your career prospects, the interest rates on your loans and credit cards, and even your ability to secure a mortgage. But here's the catch - when you're just starting out, your credit history is like a blank canvas, waiting to be painted.

Don't worry, though. We're here to guide you through this exciting phase. Let's explore six strategic moves you can make to start building a robust credit history and cultivating an impressive credit score. With i-bank by your side, you'll be well on your way to turning those big dreams into reality.

It may seem obvious, but we can't stress enough how crucial it is to pay your bills on time.

1. Punctuality Pays

The foundation of a stellar credit history is built on consistency and reliability. It may seem obvious, but we can't stress enough how crucial it is to pay your bills on time. This simple act is your golden ticket to establishing a robust credit profile.

Think of your financial behavior as your fiscal fingerprint. Every on-time payment leaves a positive imprint, gradually painting a picture of responsibility that lenders love to see. However, we understand that life can sometimes throw curveballs. If you find yourself running late on a payment, don't panic - just make sure to settle it before the 30-day mark. This is the critical threshold when lenders typically report to credit bureaus, and we want to keep your credit history spotless.

Remember, it's not just about credit card bills. Your monthly utilities, rent, and other regular payments all contribute to your financial portrait. Letting any account slip into collections is like leaving a smudge on your credit canvas - it can linger for up to seven years and put a dent in your credit score.

i-bank Pro Tip: Embrace the digital age and set up automatic payments for your accounts. It's like having a personal assistant ensuring you never miss a due date. Just be mindful of your account balance to avoid any overdraft hiccups.

2. Leverage Family Ties

One savvy strategy we recommend is becoming an authorized user on a family member's credit card. Think of it as hitching a ride on their credit coattails!

Here's how it works: As an authorized user, you'll receive a credit card with your name on it, linked to an established account. While you won't be the primary account holder, you'll benefit from their credit history. It's like getting a head start in a race - you're building credit without having to start from scratch.

However, we at i-bank always advocate for informed decisions. Remember, this strategy is a two-way street. If your family member maintains an impeccable payment record, your credit score will bask in the reflected glory. But if they hit a rough patch and miss payments, your fledgling credit could take a hit. So, choose your credit mentor wisely - opt for someone with a track record as solid as i-bank's commitment to your financial success.

i-bank Pro Tip: Before you jump on board, we recommend having a chat with the primary account holder. Encourage them to check with their credit card issuer about their reporting practices. Ideally, you want an issuer that reports to all three major credit bureaus - Equifax, Experian, and TransUnion. This ensures your credit-building efforts get maximum visibility.

3. The Power of Secured Credit Cards

A secured credit card is one of our favorite innovative tools to build your credit. Think of it as your credit training wheels - it offers all the benefits of a regular credit card, but with an added safety net.

Here's the breakdown: With a secured credit card, you make a cash deposit upfront, which then becomes your credit limit. It's like leaving a security deposit on an apartment, but in this case, you're renting credit credibility. This deposit minimizes the risk for the card issuer, making it easier for you to get approved, even without an established credit history.

The beauty of a secured credit card is its versatility. You can swipe, tap, or insert it just like any other credit card, whether you're grabbing your morning coffee or shopping online. The key difference? You're building credit with every transaction and on-time payment.

i-bank Pro Tip: Don't feel pressured to start big. Even a modest $200 limit can be your launchpad to credit success. It's not about the size of your credit limit; it's about how responsibly you use it. Remember, consistency is key. Make those payments on time, every time, and watch your credit score grow. 

4. Your Name, Your Credit

Stepping into the world of credit with your very own card is an exciting milestone. If you've already established a relationship with your financial institution through checking and savings accounts, you're in prime position to apply for a credit card. It's like having a VIP pass - your existing banking history gives you a leg up in the approval process.

i-bank Pro Tip: Once you've got that shiny new card in your wallet, use it wisely. Aim to pay your balance in full each month. This strategy is a double win - it boosts your credit score and keeps those pesky interest fees at bay. 

5. Master Your Credit Utilization

Your credit journey is like a delicate balancing act, and revolving credit plays a starring role. This financial juggling act makes up about 30% of your credit score, wielding significant influence over your financial reputation. Think of revolving credit as your financial breathing room - it includes credit cards, personal lines of credit, and home equity lines of credit.

The golden rule? Keep your credit utilization below 30% across all your revolving credit accounts combined. It's like maintaining a healthy diet - moderation is key. By keeping your credit usage in check, you're sending a clear message to lenders that you're a responsible borrower who doesn't overindulge.

i-bank Pro Tip: Let's break it down with a simple example. If your credit card has a $500 limit, aim to keep your balance under $150. This 30% threshold is your sweet spot for credit health. It's like filling your plate at a buffet - you want to enjoy the offerings without overloading.

6. Check Your Credit Report

Think of your credit report as your financial report card - it's a detailed record of your credit accounts and payment history. This crucial document is the foundation upon which your credit score is built. Just as you'd review your academic transcript for accuracy, it's essential to keep a close eye on your credit report.

Good news! The three major credit bureaus - Equifax, Experian, and TransUnion - are required to provide you with one free credit report annually. This is your golden opportunity to take a deep dive into your financial standing, whether you're a credit newbie or a seasoned borrower.

Reviewing all three reports each year is like giving your financial health an annual check-up. If you spot any inaccuracies, don't hesitate to reach out to the credit bureau for corrections. Remember, your credit report is your financial reputation - keeping it accurate is crucial for your financial wellbeing.

i-bank Pro Tip: Mark your calendar and make it a yearly ritual to fetch your free credit reports from annualcreditreport.com. It's like an annual financial treasure hunt, where the prize is peace of mind and financial clarity. Don't let this valuable resource go to waste - your future financial self will thank you for your diligence!