Only 18? It’s time to start establishing your credit

Good credit opens up a world you may not have known existed.

If you jump on the credit-building train at 18, you’ll have an easier time renting an apartment, getting a car loan and setting up your own cellphone plan when you graduate.

But credit also makes it disturbingly easy to cover the eight pizzas your roommates decide to order.

While independence is your reward for having good credit, not everyone is ready to build it responsibly in college. Know yourself, and choose a method that won’t torpedo your goal as soon as you start.

Why you need credit

A quick primer: Your credit score shows lenders, landlords and financial institutions how likely you are to repay a debt or follow through on your commitments. After you start using credit, you’ll receive a score on an 850-point scale. In general, a good score is 690 or above, but know that it will take time to get there. A score of 650 to 699 “could be considered a win” if you’re in college and you’ve been building credit for a year, says Beverly Harzog, author of “The Debt Escape Plan.”

Having good or excellent credit means:

■ Lower interest rates on credit cards, car loans, mortgages and private student loans

■ Eligibility for premium credit cards with fancy rewards

■ More easily qualifying to rent an apartment

■ Access to utilities without a deposit

■ Cheaper car insurance in most states

It can take six months after opening credit accounts to see your score.

How credit works

The factors that most influence your score are whether you’ve paid bills on time, how much credit you’re using and how long your credit history is. When you’re in the process of building credit, avoiding negative marks — like late payments — is your first priority.

Rent payments generally won’t affect your credit — unless you don’t make them, which could hurt it. But making student loan or car payments on time will elevate your score. Keep credit card balances low, and don’t carry a balance from month to month, even if it’s small.

How to build it

Credit cards probably come to mind first when you think of credit, but they’re just one way to show you can pay your bills on time.

There are some credit cards out there just for students, but they can be hard to get approved for. Instead, you can become an authorized user on your parents’ card, which means they’ll still be responsible for paying the debt, or get a secured card, which has a low credit limit and requires a deposit upfront.

Before you get a credit card, Harzog says to ask yourself these questions:

■ Do you have a checking account now, or when you were in high school?

■ Are you able to use a debit card without overdrawing your account?

■ Do you save at least some money from each paycheck?

■ Do you keep track of how you spend any income you earn?

If the answers are no, consider building credit another way.

In the end, managing your money sensibly will naturally lead to a strong score.

Schools must change the way they teach — and some are already doing so.

El Paso Community College created a transportation center that can help retrain truck drivers whose jobs are expected to be displaced by autonomous trucks by teaching them related skills like diesel tech or logistics, according to William Serrata, the school’s president.

Paul Quinn College in Dallas describes itself as an “urban work college,” President Michael Sorrell said. It requires students to work a few days a week and attend classes other days. The jobs give students — the majority of whom are on Pell grants — the chance to graduate with a work transcript and connections that create a pipeline to employment. In the fall, it plans to launch a program for alumni that allows them to return to college and learn new skills, if their jobs are displaced by technology.

■ Training and re-skilling programs aren’t keeping pace with technology change.

“While training efforts are being beefed up at very rapid levels, they probably aren’t being beefed up fast enough to keep up with disruption,” said Dallas Fed President Rob Kaplan. He said the programs must also grappled with the cultural and emotional obstacles of mid-career and middle-aged workers who may be hesitant to return to the classroom.

Jan Rivkin, a professor at Harvard Business School, said he’d like to see the private sector offer solutions. He said he’s worried by how quickly technology is causing companies to shed jobs and how slowly workers are getting retrained. He said he spoke to a well-known venture capitalist, whom he did not name, who wanted to invest in companies retraining people — but couldn’t find any.

The venture capitalist told him he realized he had invested in companies that caused job losses and “as a citizen, I’d like to be able to sleep at night.” Rivkin said part of the problem is that the private sector is displacing people and the public sector is retraining them.

■ The workforce of the future will look different — smaller, in some cases, and demanding different skills.

Dallas-based telecom giant AT&T has about 250,000 fulltime employees in the U.S. — with about 20 percent of those at call centers — but that number will fall in the years ahead, Chief Financial Officer John Stephens said. Some jobs will disappear and others will require new skills, such as data science and software proficiency instead of ability to lay cables. That’s why the company has a massive re-skilling program that encourages the legacy telecom’s employees to take college classes and get “nanodegrees.”

“When you go from cable connecting telephone poles to spectrum in the sky, you have different jobs,” Stephens said.

■ Disruption by technology may be accelerating, in part, because of changing demographics.

With a low birth rate and aging Baby Boomers, companies see technology as a way to drive down costs and drive up profitability. For example, with more efficient bottling lines, they can drive down costs and drive up profits, Taylor said.

Mike Ullman, former chief executive of Plano-based J.C. Penney, said department stores and other retailers must get creative to attract customers to their stores and compete with online retailers like Amazon, since baby boomers are at the point in life when they don’t need many new clothes.

Mark Duggan, director of the Stanford Institute for Economic Policy Research, said that the use of technology to make health care, in particular, less labor-intensive could help drive down costs.