Build your credit. Grow your empire.

Think of credit like a financial report card that shows how responsible you are with borrowing money. It's a way for lenders, like banks or credit card companies, to assess whether you’ve demonstrated that you will repay the money they lend you. Your credit history and credit score are like the grades on that report card, indicating how well you've managed your debts and paid your bills in the past. Good credit can open doors to better loan options, lower interest rates, and more opportunities — while poor credit can make it harder and more expensive to borrow overall.

Building credit might not sound as thrilling as assembling a championship-winning team or crafting a chart-topping hit. But for up-and-comers in the sports and entertainment industry, it takes on a whole new level of importance. The reason? The careers of athletes and entertainers often skyrocket at a young age, and that may allow you to achieve major financial milestones much earlier than most people. Milestones like buying a home or starting a business, both of which may get easier with a strong credit history.

For home buyers, building good credit can put you in a prime position to secure a mortgage with favorable interest rates and loan terms because lenders will view you as a reliable borrower. Same goes for those looking to translate their stardom into an entrepreneurial venture. Whether it’s launching a clothing line, starting a production company, or establishing your own brand, building credit early on will help you access the funding you need to bring your business idea to life.

Here are a few ways to help build your credit history:

#1 Get familiar with credit reports

Your credit report is like your financial highlight reel, lenders and financial institutions use it to evaluate your creditworthiness. So, you’re going want to check it out yourself, too. Not only will it help you identify and rectify errors, it’ll also help you monitor your progress. You can access your report at any of the three major credit bureaus: Equifax, Experian, and TransUnion. And these days, it’s likely your bank will have some sort of credit monitoring service too.

When you receive your credit report, look for any misspellings, discrepancies, or outdated information. If you see something that doesn’t make sense — like a new account that doesn’t belong to you or inaccurate records of missed payments — make sure you haven’t fallen victim to identity theft. Then request corrections by contacting the credit bureaus directly and providing supporting documentation.

#2 Starter credit cards and secured cards

If you don’t already have a credit card, consider easing into the process by opening a card designed for people with limited or no credit history. One good option is a starter credit card, which usually has a low credit limit to help beginners develop responsible borrowing habits (without the temptation of buying super expensive things they can’t really afford).

Another great option is a secured credit card. These cards require an upfront security deposit (typically equal to the credit limit) which serves as collateral for the card. In other words, you’ll have a built-in safety net in case you aren’t able to make a payment — because the lender can just use your deposit.

#3 Become an authorized user

Another pro move for credit rookies is to become an authorized user on someone else’s credit card. As an authorized user, you get to piggyback on the primary cardholder’s credit history. This means their responsible payment habits and low credit card balances can shine a positive light on your credit report. Just make sure to team up with someone you trust, who pays their bills on time and doesn’t max out their card. Remember, their credit actions can impact your score too. So choose wisely and communicate openly.

#4 Don’t use more than 30% of your available credit

Credit utilization refers to the percentage of your available credit that you’re using at any given time. And it’s one of the key factors lenders consider when assessing your creditworthiness. Basically, they want to see that you’re using credit responsibly and not relying too heavily on borrowed funds. The simple rule of thumb is to keep your credit utilization below 30%. So let’s say your credit card maxes out at $1,000, try to use no more than $300 at any one time. This shows that you’re using credit conservatively and not relying on it too heavily.

#5 Pay on time, every time

When it comes to building credit, paying your bills on time is the golden rule that should never be broken. Each missed or late payment leaves a mark on your credit report that can be viewed by lenders in the future. So whether it’s credit cards, loans, or even those utility and rent payments, punctuality is key to establishing a solid credit history.

Why is paying on time so crucial? Well, lenders want to see that you’re a reliable borrower who can be trusted to fulfill your financial obligations. By consistently paying your bills on time and in full — you’re demonstrating responsible financial behavior, building up your credit score, and avoiding having to cough up more money to cover late fees and pricey penalty interest rates.

#6 Diversify your credit portfolio

As you start to get the hang of responsible borrowing habits, you can take your credit score to new heights by showcasing your versatility in the credit game. Consider taking out different types of credit, such as credit cards, loans, and potentially even a mortgage or car loan. This demonstrates your ability to handle various financial responsibilities and adds depth to your credit profile. Just be sure to maintain a healthy balance and not overextend yourself. Only take on credit that you genuinely need and can comfortably manage. Because too much credit or debt can backfire, negatively impacting your creditworthiness.

#7 Report utility and rent payments

For years, utility and rent payments were often left out of the credit-building equation. But times are changing, and more services are emerging that recognize the importance of these regular financial commitments. So if you make on-time payments for utilities like electricity, water, internet, and rent, you might want to see if these services can report your payment history to credit bureaus. Just like diversifying your credit portfolio, it can add extra layers of depth to your credit profile and potentially boost your score.

Your credit history is like your personal financial brand, it shows the world that you’ve got what it takes to handle financial matters with finesse. But just like Rome wasn’t built in a day, a stellar credit score will take patience and perseverance to achieve. By familiarizing yourself with credit reports, choosing the right kind of credit card for your circumstances, being mindful of credit utilization, and paying bills on time, you’ll be poised to build your credit like you’re building your empire. Rock solid.

CRC# 3751078 09/2024