How Can Youngsters Build A Great Credit Score Early In Life?

Individuals who establish a strong credit profile early in life will have an easier time obtaining low-interest bank loans later in life. Building a strong credit score is a continuous process, and the sooner you begin, the higher your credit score will be when you’re ready to apply for loans. A strong credit score goes a long way toward enhancing a person’s creditworthiness, and young people aged 22 to 25 should start working toward a healthy credit score as soon as possible.

It is at this age that most youngsters start their career so it is smart to start building their credit profile too. The lending landscape has drastically changed in recent years to include young professionals under the ‘eligible borrowers’ umbrella. With the help of AI and data analytics, the creditworthiness of an individual is determined by a higher data set, thereby making eligibility requirements more lenient. Then there are instant loan apps, payday loans, and Buy Now Pay Later lending options that have moved away from traditional lending options. So youngsters have better access to credit than the previous generation and are in a better position to start building their credit early.

How To Start Your Credit Building Journey? 

Getting a small loan or credit card is the first step toward establishing a credit score, which helps banks make decisions about critical aspects when approving a loan request. For starters, having a good credit score allows you to borrow money from banks at considerably reduced interest rates. Individuals who desire to establish a good credit score early in life can approach numerous new-age fintech organizations which are assisting India’s millennials in establishing a strong credit score as well as financial discipline.

Getting Your First Credit Card

Though there are a number of ways for youngsters to build their credit history, the simplest option is to get a Credit Card as soon as they turn 18. Obtaining a credit card is made easier with digital lenders, as they are more likely to approve them.

Another option is to go for Secured Credit Cards that are issues based on your FD deposits held with the bank. Minors can also have credit cards if a parent who already has one authorizes an add-on card in their name. While these add-on cards have nearly all of the same functions as the main card, the spending limit can be set to a lesser amount if necessary. Teenagers can benefit from a supplemental card if they grasp the value of budgeting.

Parents can guide their children at this juncture on healthy credit habits and how to maintain a good credit score. There are various smartphone apps and digital tools to help you track your spending. The point to remember here is spending within one’s means, paying credit card payments on time, and avoiding having too many credit cards or bank accounts to manage.

Go For Lower Limit Credit Cards

The idea of getting a credit card is to establish your credit history. So you can always opt for a lower limit credit card and make minimal transactions on them. This way, you are not burdened with a high bill payment every month, which when not paid can only be a deterrent to your credit building journey.

Cultivate Healthy Credit Habits

Managing credit requires disciplined spending and repayment habits. Keep track of all your transactions to ensure that you are spending within your limits. Set reminders to pay your bills on time. If you are not good at this, you can opt for auto-debits from your bank account. Set a portion of your monthly income towards savings and investments and only spend the rest. This way, you know how much you are allowed to spend on your credit card every month.

Understand How Credit Score Works

This is crucial to build a good credit score. We all know that credit score is a 3-digit number, ranging between 300 & 900, indicating your creditworthiness to the lender. There is credit score and a credit report, they are both different. A score of 700 and above is considered ideal and can get you the best loans in the market. Learn the factors affecting your credit score – your income, your existing credit and liabilities, your credit utilization ratio, your repayment history, your credit mix, and the age of your credit. You can read more on each of these aspects on our CreditMantri website for more clarity.

You can also check your credit score regularly to understand what needs to improve. CreditMantri offers a free credit score with an in-depth analysis of your credit health report. Get it today and start your credit management journey.


Credit score is an integral part of your credit journey. Whether it is a credit card or home loan, your credit score is going to play an important role in determining how much loan you can get at what interest rate. As youngsters, you have been presented with an amazing opportunity to establish a stellar credit score from the very beginning. As we already said, building your credit score is a continuous journey and you have to be vigilant at all times to ensure that you don’t do anything that will affect your credit score negatively. Just follow the above guide and achieve a healthy credit score.

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