The Secret to Building Credit at 18 [2024 Guide]


Good credit is essential to getting as many financial opportunities as possible in life. Having a great credit score helps save money in fees and interest down the road.

It’s never too early to start building credit and establish good financial habits. After all, your credit report is a reflection of your ability to handle finances!

This article explains what a credit score is, how it works, how to build credit at 18, and how long it takes to raise your number. Let’s get started!

What Is a Credit Score and How Does It Work?

A credit score is a three-digit number used to determine a person’s financial history. Lenders look at credit scores to decide whether a borrower is trustworthy enough to handle the responsibility of paying back a loan. A higher score suggests responsibility, meaning someone is more likely to qualify for a better loan term and loan rates.

To find a good way to build credit at 18, you first need to learn the basics.

Most lenders, community banks, and credit unions rely on the FICO credit scoring modelwhen looking at loan applications. A FICO credit score ranges from 350 to 850; the similar VantageScore model ranges from 300 to 850.

A 580 FICO score or lower or a Vantage Score credit score under 660 are considered below average. Credit scoring models calculate your credit score based on the following factors:

  • Payment history
  • The total amount of debt owed
  • Length of credit history
  • Credit mix
  • New credit
DID YOU KNOW? Your payment history and credit utilization ratio make up 65% of your credit score.

Can You Start Building Credit Before You’re 18?

Yes, you can start credit building before you or a loved one turns 18! Some credit card issuers allow parents or legal guardians to add minors as authorized users to their credit cards. Note that not all credit cards report minors’ credit history, but as a parent, you should be able to report yourself to credit bureaus.

Other financial products, like credit cards and credit builder loans, have a minimum requirement age of 18 or 21.

Why Is a Credit Score Important?

It’s quite simple! The higher your credit score, the better your chances are of getting any kind of loan, as well as lower interest rates.

Here’s why it’s important to start building credit at 18:

To obtain a loan

Most people can’t afford a large purchase or emergency expenses. If you want to start your own business, buy a vehicle, or need a sizable amount of cash, you’ll probably have to apply for some type of loan. To qualify for a small business loan or an auto loan, you’ll need a good credit score.

Why? Your lenders, whether they’re online companies or community banks, will look at your credit score to decide whether to approve your application.

To get lower interest rates

Here’s why it’s really important to start building credit at 18: If your loan application is approved, the lender will use your credit score to determine the amount you receive, your interest rate, and other terms that are offered. The higher your credit score, the bigger the loan and the lower the interest rates. Some lenders may reduce your down payment if you have a good credit score as well.

To be able to get an apartment

The same applies when finding a place to live. Consider ways to build a credit score at 18 because mortgage lenders need some assurance that you will not default on paying; a good credit score is the best way for lenders to determine how risky it is to give out a mortgage loan. A low credit score can result in your loan application getting rejected or approved at a higher rate.

DID YOU KNOW? This might come as a surprise, but some employers check credit reports during the hiring process! Although it may seem unfair, they can hesitate to hire you if you’ve failed to show financial responsibility.

How to Build Credit at 18

  • Become an authorized user

To add payment history to your credit report, you’ll either need to get a credit card on your own or become an authorized user on someone else’s. If someone adds you as a cardholder to their account, you’ll start accumulating a track record as every payment will be added to your credit report even though you’re not the primary cardholder.

The downside is that the credit card company ties your credit activity to the primary cardholder. This means that any late payment, whether it’s yours or the card owner, will reflect on both of you.

  • Pay your bills on time

Here’s something to consider if you want to learn how to build your credit at 18: your payment history accounts for about 35% of your credit score. In other words, you need to pay all of your bills on time, and not just your credit accounts! If you default, you risk a company reporting you to the credit bureaus.

If a company reports a late payment, it will reflect on your score and can stay there for up to seven years. You can enroll in autopay to make sure you don’t miss a bill.

  • Get a secured credit card

If you don’t want to share a credit card with someone, even when it comes to starting your credit score at 18, you can apply to open a secured credit card yourself. A secured credit card requires a security deposit, which becomes the credit limit on the card, or the most you can spend.

A secured credit card is a good idea for someone who doesn’t have a credit score or has a minimal credit history since the lender is more likely to approve an application for the deposit.

If you repay the borrowed amount on time, you should get your deposit back when you cancel the card.

  • Get a credit card for people without a credit history

How to get a good credit score at 18 if you don’t have anything on your credit report? If you’re having trouble getting a credit card because you have no credit history, there are options for young people with little to no credit.

One of them is getting a card from a credit issuer that does not check credit history. These companies don’t look at your credit history but will check your financial habits and income to determine eligibility. You don’t need a deposit and will get a limit between $500 and $10,000.

Another way to solve how to start credit at 18 is to opt for a student credit card. They have low credit limits, but high-interest rates; a credit card meant for students might provide some good offers in exchange for good grades. You can also use it to receive a traditional credit card if you make payments regularly and demonstrate responsible spending.

  • Get a student loan

Technically, it’s not the best idea to take out a type of loan just to build a credit score. If you’re a student and you need money, though, getting a student loan can help build a good credit score early on if you make timely payments. Another advantage of student loans is that they make credit reports more versatile.

While student loans can help an 18-year-old with their credit score, they can also rack up significant debt.

  • Keep your credit balance low

Keeping a low credit utilization ratio is crucial to maintaining a good credit score, regardless of your age. Your credit utilization represents the percentage of credit limit that you’re using. The general rule of thumb is to keep your credit card utilization under 30%. For example, if your credit card limit is $10,000, don’t spend more than $3,000 at a time.

High credit utilization indicates that you have trouble paying bills on time, which negatively impacts your credit score.

  • Monitor your credit score

It’s not just about learning how to establish credit at 18 — you also need to maintain it! To keep track of your progress, keep tabs on your credit score periodically; the best way to do so is to check your free credit reports.

Every U.S. resident can obtain one free copy of their credit report a year from each of the three major credit bureaus: Equifax, Experian, and TransUnion. You can order a copy online from If you believe your credit report contains inaccuracies or is incomplete, you can dispute it with the credit bureau for free.

Key Takeaways

Your credit score is a reflection of your financial history.
A good credit score allows you to qualify for loans with low interest.
Can you build credit before 18? Yes, but the only way to do so is by becoming an authorized user.
If you don’t want to get a credit card to build credit, you can become an authorized user to also qualify for a student loan.
If you don’t have a credit history, you can still get a credit card, but it will come with higher interest rates.

How Long Does It Take for a Credit Score to Improve?

The time it will take to boost your credit score depends on several factors. If you’re wondering how to get credit at 18, you probably have little or no credit history. In this case, you can improve your score within months with good financial behavior.

If your score is low because of debt or bad financial history, however, it might take years to recover.

Generally, it’s up to lenders to report your payments, so there might be a slight delay between paying your bills and seeing a decreasing balance.

How long does it take to establish a credit score? If you start building a credit score at 18, you’ll need at least one opened account regardless of account types; wait at least six months for a FICO score to develop. A VantageScore generates faster as all it needs is an opened account.

DID YOU KNOW? Certain financial events can affect your credit score for years! For example, bankruptcies stay on credit reports for an average of seven years.


Building good credit is crucial since a high credit score results in approved loans, credit cards, and low-interest rates. Landlords and employers may check your creditworthiness to get an idea of your financial responsibility, which is why it’s important to start learning good financial behavior early on to build a good credit score.

There are several ways to build credit at 18, including getting a secured credit card, a student loan, or becoming an authorized user.

Good luck!


What should my credit score be at 18?

A credit score for most 18-year-olds is non-existent. The only way to start building credit before 18 is to become an authorized user on someone else’s account. If a minor does have a credit score, it might actually be a case of identity theft.

How to start building credit at 18?

There are multiple ways to start building a credit score once you turn 18. If you’re wondering how to build credit at 18, you can get a credit builder loan, a student loan, student credit cards, a secured credit card, or a credit card for people with no credit history. The key is to make on-time payments and keep your credit utilization ratio down.

Can you build credit before 18?

The only way to start building a credit score before you’re 18 is for someone to add you as an authorized user to their credit card. Remember that their credit activity will reflect on your credit report.


I learned a lot about finance after working for a digital marketing company specializing in investing and trading stocks, forex, etc. After that, I got exposed to other verticals such as wealth management and personal finance, which further improved my understanding of the financial world.

Latest from Ace

How Much Does a Surety Bond Cost in 2024 What Are Variable Expenses & How to Save on Them All Types of Bonds Explained (The Ultimate Guide for 2024) What Is Asset Management? [2024’s Full Guide]

Leave a Reply