Taking out an installment loan can help consumer
build their credit scores in multiple ways — provided they borrow a small amount and repay the lender on time.
Student loans help
build credit scores when you make on - time payments over time, and gradually reduce the balances owed.
However, you can't
build your credit score until a credit card company accepts your application and most credit card companies refuse to provide credit to applicants who don't have credit histories.
That's because having a credit card and using it responsibly can help millennials
build their credit scores which would help them qualify to refinance their student loans at lower interest rates.
However, with its low fee and APR, it makes it very easy to
build your credit score quickly, which will enable you to qualify for an unsecured card with another issuer.
This would be a great time to help your
child build a credit score that's worthy of the dean's list by teaching the basic rules of how credit cards work.
I know that some jobs and some apartment rentals check credit, though, so I think it makes sense to
build a credit score while you are building the income and savings.