« Back to News & Blog

Establishing and Using Credit

Young adult smiling using laptop and credit card and laptop

Establishing and using credit responsibly is a crucial aspect of financial literacy. Credit is a huge responsibility and if you aren’t ready or don’t feel you have the means to pay back what you borrow that’s okay. Building credit can take time but if you end up with poor credit due to not being prepared for the responsibility it can take even longer to rebuild.

Here are four effective ways to start building credit responsibly:

  1. Secured Credit Card: Use a secured credit card, backed by a cash deposit, to demonstrate responsible credit use.
  2. Credit-Building Loan: Take out a small credit-building loan, repaying it on time to establish creditworthiness.
  3. Authorized User: Ask to be added as an authorized user on a trusted adult’s credit card to benefit from their positive credit history.
  4. Co-Signer: If necessary, enlist a co-signer—like a parent or guardian—to help you qualify for credit cards or loans.

Using Credit

When deciding to extend credit or not, lenders typically review your:

  • Capacity – income & financial obligations (Income, expenses, debts)
  • Capital – assets & financial resources (investments, savings, or property)
  • Character – credit report & score

 Remember, missing or being late on just one payment can have a quick negative impact on your credit score, and it will take a while to build back up from the drop.

This is why it is important to make payments on time every month. If you are concerned about keeping track of due dates, set up automatic payments, so you make sure your bills are paid on time each month.

Pick one specific small, budgeted expense to use your card for each month. Something like gas for your car, or a subscription service like Netflix. Use the card just for that purpose and keep the balance low, and then pay the full balance off when you get your monthly statement. This is a great way to build a positive payment history while keeping a low balance and avoiding interest when you pay the full statement balance off monthly.

By implementing these strategies and using credit responsibly, you can lay the foundation for a strong credit history and financial independence as you enter adulthood.

Stay Savvy!



Celia Otero is a Jeanne D’Arc Financial Wellness Specialist. She’s dedicated to promoting financial education and literacy and strives to ensure that individuals have the tools they need to navigate the complexities of personal finance. With a background in early education and adult learning, Celia believes that by empowering individuals through education they will learn to develop strong habits, make informed choices, and achieve financial well-being. You can find out more about Celia and the rest of the Financial Wellness team here.