In this guide we often reference millennials (people who reached young adulthood after the year 2000), but this guide is also applicable to new immigrants to the US or anyone who, for whatever reason, has a limited or nonexistent credit history.


Recently statistics have shown that millennials have the lowest credit scores among all age groups in the United States. This is undoubtedly influenced in part by the lack of a long credit history that older age groups have, but also the fact that after the financial crisis young people are increasingly turning away from credit cards. Yet this may not be good for today’s youngsters in the long run, here’s why:

Our society is governed by certain systems, and one of them is the system of credit. Now you may think this is not a good thing, you may think the 1% are a bunch of greedy “banksters”, the credit rating system can trap people with poor credit in poverty with no way out and I would be inclined to agree with you. But in this world you sometimes have to play tedious games in order to get things done, and this, my friends, is one of those. No credit score, no loans, simple as that. Perhaps you don’t want to borrow money now, but think about the future when you want to take out an auto loan, or a mortgage for your first home, you will need that credit score. You even need a credit score to avoid a deposit on a mobile phone contract and also for renting and apartment. But the good news is, you can play the bankers at their own game, and do pretty nicely for yourself.

When I was in university, the bank offered me an interest free overdraft of about $1500, although I didn’t want to borrow any money, I accepted it, overdrew my account by almost that amount and put the money in a high interest savings account with the same bank, this was before the financial crisis and the interest rate was 5%, so over my first year I made $75 – free money. But all I did was actually lend the bank its own money at interest! Yet this was totally within the rules, and the bank never protested.

Now if you are smart like this, play by the rules (even when it feels you are actually cheating the bank), set up credit card accounts, always pay on time, the bank will love you, even if you try to squeeze every last penny of interest or bonuses out of the bank. They will increase the amount of money they are willing to lend you, your credit score will increase, and you will be seen as a lower risk, so lenders will be willing to give you loans at lower interest rates which will benefit you in the future when you want an auto loan or mortgage. You will also be able to access some cards with pretty cool rewards and perks, like frequent flier miles, hotel points, or get a credit card that gives you a large sign up bonus or airport lounge access.

So, how do you get that first card? Let’s take a look in the next article.