Integrated Family Community Services 3370 South Irving Street, Englewood, CO 80110-1816 Ph: 303-789-0501

How Being New To Credit Can Be An Advantage

Almost everyone will start out in their young adult years with minimal or no credit history. At first glance, it can be a disadvantage to have no established credit history. After all, without a good credit rating, you may not qualify for the best rates and terms on loans and credit cards. You may also have to pay higher deposits when you are opening utilities accounts and more. While there are some downsides associated with having minimal or no established credit history, there are some advantages associated with being new to credit as well.

You Are Not Burdened With Debt

Many people who have a high credit score work unfortunately hard to maintain their good rating. This is because many people will fall heavily into debt and will have to work hard to lower debt balances and to make payments on time each month. When you are just starting out, you may have little or no debt to your name. This is a great financial position to be in.

Your Credit Rating Is a Blank Canvas

Furthermore, your credit rating is not formed yet. You do not have any blemishes that you need to worry about erasing. Starting on neutral ground is much better than having to work hard to correct negative events on your credit rating. With this in mind, you are already in a better position than those who have negative events on their credit report.

You Can Apply for Credit Strategically

While you may not have debt or a credit rating yet, you certainly want to work hard to establish a high credit score. Credit, after all, can help you to obtain a great rate when you apply for a car loan, a home loan or more. It also may be reviewed when you apply to rent a home, apply for a new job or purchase insurance. You can take out one or two loans very strategically to establish credit. Ensure that these debts are affordable for your budget, and avoid falling too heavily in debt. Be sure to ask for specials. Companies like BlueSky Auto Finance, and some banks, often have special offers for first time buyers/borrowers or people with no credit history. These deals can help to keep your finances in a good place.

Most people will benefit substantially by having a higher credit rating. While you may not have a credit rating yet, this is not necessarily a setback. You are in a great starting position for establishing a solid credit rating right from the start. Take time to review your loan and credit card options as a first step, and open only a few accounts strategically to get off on the right foot.

Tim Esterdahl

Tim Esterdahl is the editor of IFCS blog. He is a married father of three and enjoys golf in his spare time.
Tim Esterdahl

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Thank you so much to @ChristianBros Highlands Ranch, Arapahoe Road, and Ken Caryl for helping our clients last weekend, they took care of so many ailing hearts and sick vehicles. Though the hope they gave, lives were changed. We so appreciate your support of IFCS year-round!

Sarah &Javon, Arapahoe Community College Dean of Students sharing excitement for the Food Bank. We visited last week to learn more about the school's programs for students in need and to explore opportunities for collaboration.

Thank you to Rotary Club of Highlands Ranch for their continuous support of our Hunger Alleviation Programs. We are proud to partner with them. Thank you for being a Gold Sponsor of the October 26th Boo-athon Halloween Bowling event.

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