How to build credit at 18: best tips for young adults

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Becoming an authorized user on an open credit account, paying down student loans and securing credit builder loans can help young adults build credit.

Learning how to build credit at 18 can pay dividends throughout your life and help you explain financial concepts to others. Length of credit history is one of many factors that impact your overall credit score, so building credit early on can make it easier to secure credit cards and loans in the future.

Here, you can learn how to build credit at 18 and better understand which factors influence your credit health. You can also discover how Lexington Law Firm can help you improve your financial literacy.

Key takeaways:

  • You don’t have a credit score until you take actions that are reported to credit bureaus.
  • Length of credit history makes up 15 percent of your FICO® credit score.
  • Paying down student loans will positively affect your credit over time.

Table of contents:

1. Learn what credit score you start with

Starting credit scores vary from person to person and are largely based on each individual’s financial habits. When you first secure a loan, a credit card or a line of credit, your credit habits during the following six months will determine your starting score. Afterward, your credit score can increase or decrease based on several factors.

Who provides credit scores?

Credit reporting bureaus keep track of your credit history and provide reports based on your financial habits. Equifax®, Experian® and TransUnion® are the three main credit bureaus you can request a credit report from. Your credit score will be based on the information found in your credit report.

The law requires each bureau to provide at least one free report each year. Checking one of your credit reports every few months throughout the year can help you track your credit habits and progress.

2. Become an authorized user on a credit card

Just like other adults, young adults can become authorized users on another person’s credit card with the cardholder’s permission. With this method, an individual without any credit history can make purchases with a credit card and gradually build credit.

The caveat to this method is that all activity with a credit card will affect everyone connected to it. If a young adult gains access to one of their parents’ credit cards, the child’s activity will increase or decrease their parent’s credit score as well as their own.

3. Apply for a student loan

As previously mentioned, length of credit history can positively impact your credit score. For many young adults, a student loan will be their first credit account until they can acquire a credit card.

Paying off your loan might temporarily cause your score to dip, as your oldest account will be closed. However, regularly making timely payments will benefit your overall credit score far more than this dip will hurt it.

4. Secure a credit builder loan

Credit builder loans are helpful options for individuals with no credit history and people looking to repair their credit. These loans often have flexible requirements for applicants, though they typically have higher-than-average interest rates and brief repayment terms.

Community banks, credit unions and online lenders offer various credit builder loans. Large commercial banks don’t usually offer these loans, as their small payout amounts (normally $300 – $1,000) aren’t helpful to their everyday operations.

5. Frequently review your credit report

Challenging an error on your credit report and getting it removed can be an effective way to improve your credit. To discover these issues, it helps to routinely check your credit reports throughout the year.

Equifax, Experian and TransUnion all accept challenges by phone or online, and Lexington Law Firm can also help you challenge any errors on your report. Explore our services and see what features our tiered plans provide.

6. Space out your credit card applications

Every time you apply for credit, a hard inquiry occurs. This means that a third party (i.e., the bank offering the credit card you applied for) asked to review your credit report. Hard inquiries can appear on your report for years, but they’ll generally only hurt your credit for 12 months.

Issues can arise if you apply for too many credit cards or other lines of credit in a short period. Those dings against your credit can mount and damage your credit. On the other hand, spacing out your applications can help keep your credit healthy and stable.

7. Manage your credit utilization ratio

Your credit utilization measures your current account balances against your total credit limit. The higher your utilization is, the more negatively it will affect your credit. Ideally, it’s best to keep your utilization below 30 percent, or even 10 percent if possible.

Here’s an example to help visualize credit utilization. If you have a total credit limit of $5,000 and you’re currently using $500 of your available credit, your credit utilization will be 10 percent.

8. Use a credit monitoring service

Credit monitoring simply refers to reviewing credit reports and making decisions based on that information, whether you see inaccurate information that needs to be fixed, or accurate information that shows you where you can improve your credit usage. People can do this process themselves or seek out a credit monitoring service for help. Institutions like banks, credit unions and the three credit bureaus all provide distinct credit monitoring services.

Learn to manage credit with Lexington Law Firm

Young adults looking to build and manage their credit have many resources at their disposal. Still, professional advice from individuals with years of experience can make a big difference. Lexington Law Firm can provide a free credit assessment to help you get a sense of where your credit is starting and where you may want to go from here.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Reviewed By

Brittany Sifontes


Prior to joining Lexington, Brittany practiced a mix of criminal law and family law. Brittany began her legal career at the Maricopa County Public Defender's Office, and then moved into private practice. Brittany represented clients with charges ranging from drug sales, to sexual related offenses, to homicides. Brittany appeared in several hundred criminal court hearings, including felony and misdemeanor trials, evidentiary hearings, and pretrial hearings. In addition to criminal cases, Brittany also represented persons and families in a variety of family court matters including dissolution of marriage, legal separation, child support, paternity, parenting time, legal decision-making (formerly "custody"), spousal maintenance, modifications and enforcement of existing orders, relocation, and orders of protection. As a result, Brittany has extensive courtroom experience. Brittany attended the University of Colorado at Boulder for her undergraduate degree and attended Arizona Summit Law School for her law degree. At Arizona Summit Law school, Brittany graduated Summa Cum Laude and ranked 11th in her graduating class.