At what age can you start building credit?

what age can you start building credit

At what age can you start building credit? Technically, a consumer’s credit history starts when they reach the age of 18. However, people can start building good financial habits to set themselves up for credit success at just about any age! 

If you are a young adult thinking about your finances or a parent or guardian, you may wonder what age a person can start building credit? Most young people going at it alone will have to wait until they are 18. However, a pre-teen or teen can be added as an authorized user on an adult’s financial account to start building credit as young as 13! Keep reading for more information on the different options available for building credit and its various benefits! 

Credit Building Options for Children and Young Adults Under 18 

When an individual is under 18, adding them as an authorized user on a credit card is the most popular option. As long as your credit card company reports authorized user payment history to all three major credit bureaus, the individual who is a minor will be a part of the credit card account. What does this mean for credit building purposes? An authorized user’s credit will now be tied to the primary borrower’s revolving credit account. Any uses or payments will be recorded onto a credit report for that authorized user. 

Before adding a child to a credit card account, it is essential to think about your own financial habits. Because if you miss any payments on your credit card, that will also impact the minor that is an authorized user. On the other hand, positive payment history can be an excellent start for a young person to build credit. 

You should also consider the amount of power that comes with being an authorized user. With this title, your child can use your credit card online or in person just like you would. And so, definitely, something to discuss and consider before adding another person to your credit card. 

Building Credit at 18 and Older

If you have just turned 18 or are in your early twenties and are trying to build credit, it may seem like a daunting task, but it is definitely possible and worth it! Here are the different options that can help you build credit and establish credit scores even if you are starting from scratch.

Secured Credit Cards

Secured credit cards are exactly what they sound like. Lenders will provide you with usage after you put in the funds to use the card. The amount you deposit will be the card’s credit limit. Once you start using your credit card and paying it back, those transactions will be reported to credit reporting agencies. If you make your payments on time, you may be able to get credit from the lender without using a down payment (an unsecured credit card). Secured credit cards can be a great way to learn to use credit cards wisely, all while building credit. 

Reporting Your Rent Payments and Utility Bills

Another way to establish a credit history is by getting your rent and utility payments reported. There are a few ways to do this. You can talk to your landlord and utility companies and ask them to report that information for you. If that is not possible, several third-party services can help report that information for you to the major credit bureaus. With this reporting in place, it can be easy to build credit. Remember that any missed or late rent or utility payments will also show up on your credit report, so ensure you have good financial habits before signing up for these services. Additionally, not all score models will include these payments. 

Credit Builder Loan

A credit builder loan works by collecting monthly payments from a borrower before making a loan amount available. You will have to make monthly installments until you reach the required amount. The great thing about these payments is that they will be reported to all credit bureaus. And once you get the loan money and start paying that back, it will also be reported onto your credit reports! 

Get a Cosigner for a Loan Option

Another thing you can consider if you are trying to build credit or improve your credit is adding a cosigner to a loan option. When you ask someone to cosign on a loan, you ask them to enter into a loan contract with you. If the primary borrower cannot repay the loan, they have to legally take on the responsibility of paying back the loan. 

It can be challenging to qualify when it comes to traditional personal loans and credit cards if you don’t have good credit. And so, adding a cosigner who does have a good credit rating can increase your chances of approval. And it could potentially increase your loan or credit card amount. Getting a loan and repaying it on time can be an easy way to build good credit. Keep in mind that in addition to paying back the amount you borrowed from the financial institution, you will also have to pay back interest—both of these costs will be a part of your monthly payments. 

Student Loan Options

Most people pursue college or other forms of higher education after they graduate high school. And to pay for things like tuition, books, room and board, student loans can help. Federally-funded student loans are always the better option over private lenders. The flexible thing about federal student loan funding is that you don’t need good credit or established credit to qualify. And you won’t have to worry about paying them until you graduate or decide to leave school.

Another benefit is that repayment is usually highly flexible, and interest rates will be low. Once you start repaying your student loans, that payment activity will be reported to the major credit bureaus and can help you build your credit. 

A Breakdown Of Building Credit For All Ages 

Age GroupCredit Building AspectDescription 
13-17Joint AccountsAdults can open joint checking or savings accounts with minors, helping them get acquainted with managing finances.
18-20Retail Credit CardsYoung adults can consider applying for retail credit cards, which often have lower eligibility criteria, to start building credit.
21-24Auto LoansIn this age group, individuals may start considering auto loans, which, when paid responsibly, contribute positively to credit history.
25-30Mortgages LoansIndividuals might start exploring mortgage loans for home purchases, a significant component in building credit history.
All AgesCredit Monitoring Regularly monitoring credit reports for inaccuracies or fraudulent activities is essential for maintaining a healthy credit score.
All AgesFinancial Education Continuous learning about credit management, rights, and best practices is crucial for effective credit building at any age.
All AgesPeer-to-Peer Loans P2P loans can be an alternative credit building method, where one borrows from individual investors instead of traditional banks.
Disclaimer: The information provided in the above chart is for general informational purposes only and should not be considered as financial advice. The strategies and information listed are not exhaustive and might not be suitable for every individual or circumstance. Consumers should consider consulting with a financial advisor or conduct further research to understand the implications and suitability of the various credit-building aspects mentioned, based on their unique financial situations and objectives. The applicability of the information may vary based on local, state, or federal laws and regulations.


What Are Some Benefits of Having a Positive Credit History?

Having a positive credit history and a good credit score – which go hand in hand, is crucial to your financial health and stability. Not only will your credit score and credit history directly impact the kinds of loans or credit cards you can get, but it will also impact things like your ability to buy a car or a home and sometimes even help or hurt your employment search. The bottom line is that you could get the best and most affordable financial products with a positive credit history. And have access to a better quality of life!  

Building Good Credit Habits at an Early Age

No matter how old a person is, they can start learning about good financial and credit habits. Here are some accessible places to start when trying to build positive habits with money:

Making Payments on Time

Did you know that your payment history is the single largest factor that impacts your credit score? Late payment can stay on a credit report for seven years, and even having a few can negatively impact your credit score. 

And so, learning to be punctual with your money is crucial. For adults, a secured credit card is an excellent place to start when trying to learn about timely payment. While for children, something as simple as lending and asking for a portion of that money back on the same day each month can help them understand the importance of timely payments. 

Understand and Limit Your Credit Utilization Ratio

Your credit utilization ratio is the amount of usable credit you have to the amount of money that you owe. When your credit utilization is over 30%-35%, it can negatively impact your credit score. And so, getting into the habit of tracking how much debt you have, how close to max your credit cards are, and minimizing revolving credit use while maximizing your monthly debt payments can all help with this ratio. 

Limiting Hard Credit Inquiries

Once you have credit, It may be tempting to apply for several different loan options on a whim. However, each hard credit check will lower your credit score by a few points. And so, it will be helpful to learn to have self-control with potential loan or credit card options. 

Getting a Savings Account

A savings account will be an essential tool for your financial future. It can protect you from borrowing money from high-interest loan options like payday loans if you need emergency money. Instead, with an emergency fund, you can use your own money and replenish it when you are caught up again. 

Learning to Budget 

Budgeting is one of the most important tools when tracking your money and setting financial goals. Both adults and children can use all kinds of budgeting methods to organize their finances. With a budget in place, you can rest assured you’ll have the money you need to make your loan or credit card payments on time. 

FAQ: Establishing Credit 

What are secured credit cards, and how do they help in building credit?

A secured credit card requires a cash deposit, which serves as collateral and sets the credit limit. It allows individuals to establish credit through responsible use and timely payments.

Are student credit cards a good option for young adults to start building credit?

Yes, a student credit card is specifically designed for students and can be a good starting point to build credit, as it often has lower credit limits and more lenient approval requirements.

How does having a diverse credit mix impact my credit score?

A diverse credit mix, meaning having various types of credit accounts like credit cards, retail accounts, and installment loans, can positively impact your credit score as it demonstrates your ability to manage different types of credit.

What is the significance of a credit limit in a credit account?

The credit limit in a credit account is the maximum amount you can borrow. Maintaining a balance significantly lower than the credit limit is beneficial for your credit score.

How can I improve my credit mix to enhance my credit score?

You can improve your credit mix by responsibly managing various types of credit accounts, such as a secured credit card, student credit card, or installment loans.

What steps should I take to establish credit if I don’t have any credit history?

To establish credit, consider applying for a secured credit card, becoming an authorized user on someone else’s credit account, or obtaining a loan with a cosigner.

How does the utilization of a credit limit affect my credit score?

Utilizing a high percentage of your credit limit can negatively impact your credit score. It’s advisable to keep the utilization below 30% of the available credit limit.

Can opening multiple credit accounts help in building a credit score faster?

Opening multiple credit accounts can increase your credit mix, but it may also lead to hard inquiries and a decrease in your credit score. It’s essential to manage new accounts responsibly.

Is it necessary to have a job to apply for a student credit card?

Having a job can improve the chances of approval, but it’s not always necessary. Some issuers consider other sources of income or allowances when issuing a student credit card.

How often is the credit score updated when building credit?

Credit scores are typically updated every 30 days. Regularly checking your credit score can help you understand how your financial behaviors impact it. It’s estimated that 63$ of consumers check their credit score every month!1

A Word From CreditNinja About Establishing Good Credit History 

It’s never too early to start building credit. It doesn’t really matter where you start, you can build credit from nothing. CreditNinja encourages everyone who has a credit history to check their credit reports often to monitor their financial health. The better your credit is, the easier time you may have finding approval for loans and other financial opportunities throughout life. 

Check out the helpful CreditNinja blogroll for tons of free articles about building credit, managing a budget, handling your finances, bad credit loans, and more! 


  1. 63% of Consumers Check Their Credit Scores Monthly | PYMNTS
  2. How to establish a credit history for children | Chase
  3. At what age can you start building credit? – Lexington Law
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