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How to Build Credit

Get tips on the best ways to build credit—even if you’re a young adult.

By
Laura Adams, MBA
5-minute read
Episode #169

Money Girl's Quick and Dirty Tips for Building Credit from Scratch

How to Use a Subprime Credit Card to Build Credit

Another type of card that’s available if you have a short credit history is a subprime credit card. They’re real credit cards with sky-high interest rates (some as high as 30%!) and usually come with low credit limits and extra fees. So, use subprime cards with extreme caution. Remember that the only reason to use one is to build up a strong payment history, not to rack up huge interest charges. Find subprime offers on sites like Bankrate.com and Creditcardguide.com.

My quick and dirty tip for using these alternate types of credit cards is to make small purchases that you’re absolutely sure you can pay off in full each month. That way you never get hit with outrageous interest charges and you prove that you know how to handle credit. Your credit baby steps will start to pay off. You’ll establish credit, your credit score will increase, and you’ll qualify for loans or credit cards with reasonable terms. You’ll find links to all the websites I mentioned at the bottom of this page.

For more information about credit scores please check out my Quick Tip about which factors affect your credit score the most.

Money Girl’s 10 Steps to a Debt Free Life

If you prefer to read a book rather than listen to it, you’re in luck! Money Girl’s 10 Steps to a Debt Free Life is now available as a short e-book that you can purchase in the Amazon Kindle Store, the Sony Reader Store, the Fictionwise E-bookstore and more. Learn how easy it is to get out of debt and stay out of debt for good--for less than $4.00! Take control of your finances and create a more secure future.

More Resources:

CARD Act Fact Sheet

Girl with Credit Card image from Shutterstock

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About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.