Whether you're heading to college, starting your first job, or simply learning how to manage money on your own, understanding credit is one of the most valuable financial skills you can develop. Many young adults don't think about credit until they need a car loan, apartment, or mortgage. By then, it's easy to wish you'd started building healthy credit habits sooner. The good news? A little knowledge now can make a big difference later. Here are a few things we wish everyone knew at 18.

1. Opening Your First Credit Card
For many young adults, a credit card is the first step toward building a credit history. Used wisely, it can help establish a strong financial foundation. When choosing your first credit card:

• Look for a card with low or no annual fees. Annual fees can add unnecessary costs when you're just getting started. A card with fewer fees allows you to build credit without paying simply to keep the account open.
• Understand the interest rate and terms. If you carry a balance from month to month, interest charges can add up quickly. Knowing how the card works can help you avoid unexpected fees and make informed borrowing decisions.
• Use the card for purchases you can already afford. Treating your credit card like a debit card helps prevent debt from accumulating. Charging only what you can comfortably repay keeps your finances manageable and demonstrates responsible credit use.
• Pay the balance in full whenever possible. Paying your balance in full helps you avoid interest charges and keeps your credit utilization low. It also establishes a positive payment history, which is one of the most important factors in building strong credit.

The goal of a first credit card isn't to borrow more money. It's to establish a record of responsible financial behavior that can benefit you when applying for future loans, renting an apartment, or reaching other financial milestones.

2. Student Loans and Your Credit
Many students don't realize that student loans can affect their credit profile. While you may not need to make payments while you're in school, your loans become part of your credit history. Once repayment begins, making payments on time can help strengthen your credit. Missing payments, however, can negatively impact your credit score and remain on your report for years.

• Know who services your loan. Your loan servicer is the company that manages your loan and payments. Knowing who they are ensures you receive important updates, payment information, and notices about repayment options.
• Understand when repayment begins. Many student loans offer a grace period after graduation or when you leave school. Knowing when payments start helps you prepare your budget and avoid unexpected bills.
• Explore repayment options before payments become difficult to manage. Federal and private lenders may offer different repayment plans or assistance programs. Understanding your options early can help you avoid missed payments and reduce financial stress.
• Set reminders or automatic payments to avoid missing due dates. Payment history is an important factor in your credit profile. Making payments on time can help build positive credit history, while missed payments can stay on your credit report for years and make future borrowing more difficult or expensive.

Student loans can be a valuable investment in your future, but they're also a financial responsibility. Staying informed and making payments on time can help you build credit confidence while keeping your long-term financial goals on track.

3. Start Building Credit Early
One of the biggest factors in your credit profile is the length of your credit history. That's why starting early can work in your favor. Building credit doesn't happen overnight. Establishing positive habits now can make it easier to qualify for loans, obtain favorable interest rates, and achieve future financial goals. Simple ways to build credit include:

• Making all payments on time. Payment history is one of the most important factors used to calculate your credit score. Even a single late payment can negatively affect your credit, while a consistent record of on-time payments helps demonstrate reliability to lenders.
• Keeping credit card balances low. Lenders look at how much of your available credit you're using, known as your credit utilization ratio. Using a large percentage of your available credit can signal financial stress, while keeping balances low shows you're managing credit responsibly.
• Avoiding excessive applications for new credit. Every time you apply for credit, a lender may perform a hard inquiry on your credit report. Multiple applications in a short period can make it appear that you're taking on more debt than you can manage.
• Maintaining older accounts when appropriate. The length of your credit history matters. Older accounts help demonstrate a longer track record of responsible credit use, which can positively influence your credit profile over time.

Consistency matters more than perfection. Building strong credit isn't about making one perfect financial decision. It's about making smart choices month after month. Small, responsible actions over time can have a significant impact on your financial future.

4. Understand Your Credit Report
Your credit report is essentially a financial report card. It contains information about your credit accounts, payment history, and borrowing activity. Reviewing your credit report regularly can help you:

• Verify that information is accurate. Mistakes can happen, and inaccurate information could affect your ability to qualify for loans or receive favorable interest rates. Reviewing your report gives you the opportunity to identify and dispute errors.
• Spot signs of identity theft or fraud. Unfamiliar accounts, inquiries, or addresses may be indicators that someone is using your personal information without your permission. Catching fraud early can help limit financial damage.
• Monitor your overall financial health. Your credit report provides a snapshot of your borrowing habits and payment history. Regular reviews can help you understand how your financial decisions are impacting your credit profile.
• Identify opportunities to improve your credit standing. Reviewing your report can help you recognize areas for improvement, such as reducing debt, bringing past-due accounts current, or correcting inaccurate information that may be affecting your score.

Many people are surprised to learn that credit reports aren't always perfect. Taking a few minutes to review yours each year can help you protect your identity, improve your financial health, and ensure you're prepared when it's time to apply for credit.

Credit Confidence Starts with Knowledge
Building strong credit isn't about being perfect. It's about making informed decisions and developing responsible habits over time. The earlier you understand how credit works, the more prepared you'll be for life's major milestones, whether that's renting your first apartment, financing a vehicle, purchasing a home, or starting a business.

Take a few minutes today to learn more about your credit and begin building the financial confidence that can benefit you for years to come. Have questions about credit or borrowing? Stop by your local BankWest location and visit with one of our friendly team members. We're here to help you navigate your financial journey with confidence.