Here’s how an 18-year-old built credit and bought a house.

The determination to build credit and buy a house gave him the buying power to get a mortgage at a very young age. What an accomplishment for an 18-year old!

Equally important, he was able to get a great interest rate and a low monthly mortgage payment!

Hi my name is Renee Hugger, I am a Financial Coach. I’m passionate about helping motivated individuals build credit so they can use credit as an asset.

“You helped me achieve my goal of buying a house at a young age by telling me how to build credit”

Here are the tips I gave him:

How to establish a credit score

When you are first starting out, you do not have a credit score. You need to apply for credit, get approved and then start building credit by making small purchases.

My first suggestion was to open a credit card with a low credit limit.

I recommended opening a credit card where he held his checking or savings account.

For the purpose of getting a credit card, the financial institution will see how responsible you are with your money. In addition, if you have money in your savings account, that’s even better.

Most important, they will verify you don’t overdraw your checking account. Your goal is to be a low credit risk.

I recommend starting with a credit limit of $500.

Use your credit card to build credit, not debt

It is important to know that when using credit, you should not exceed spending 30% of your credit limit. Even lower is better, like 10%.

For example, if you have a $500 credit limit, you should not spend more than $150.

If you do spend more than $150, it will negatively affect your credit score.

It’s important to remember to use your credit card each month to build credit. If you don’t use your credit card, you are not building credit.

In contrast you should not use the credit card to make everyday purchases. In fact, it’s easy to overspend using a credit card.

When starting out, my recommendation is to only use your credit card to make one purchase a month. This way it is easy to pay the balance in full when you get the bill.

Make your credit card payments on time.

I want to emphasize how important it is to pay the balance in full each month. This is a great routine to get into to set yourself up for success.

One example, put $10 of fuel in your car/truck each month and pay with your credit card. When you get the bill pay it in full.

Another key point is to remember  is to pay your credit card bill on time. As a result, you will establish credit and continue building it.

To summarize, apply for a credit card with a low credit balance of $500 – $1,000.

Next use the credit card to make only one purchase each month.

Pay your balance in full each month.

Make your payments on time.

Taking these steps will help you build credit so you can use it as an asset in the future.

When you build credit, you are gaining an asset. An asset that will help you grow in your financial life to get the best interest rates, loan payments and offers.

Ultimately, having good credit will help you reach your financial goals.

Check out my upcoming events so you can buy your first home with confidence.

Your success is my success!