How can I build credit at 18?

The best way to build credit at 18 is to get a credit card in your name and use it responsibly. All major credit cards report account information to the credit bureaus each month, so as long as the information shows on-time payments and reasonable credit utilization, you’ll be on your way to building a good credit score. You can also try getting a credit-builder loan and having your on-time rent payments reported to the credit bureaus to help build your credit.

How to Build Credit With a Credit Card at 18

1. Become an authorized user on a family member’s credit card. It’s an easy way to build up your credit history.
2. Apply for a starter credit card in your own name so you can build credit faster. You can get a credit card at 18 with no credit as long as you have enough independent income to afford minimum monthly payments.
3. Set up automatic monthly payments for your starter card from a bank account to ensure on-time bill payments.
4. Keep your credit utilization low, by making sure your card’s monthly statement balance is much lower than the credit limit.
5. Save as much as possible and minimize debt. This will make you more resilient financially and less susceptible to missing bill payments.
6. Monitor your credit and adjust as needed. If you use WalletHub, we’ll give you personalized advice.

Using a credit card isn’t the only way to build credit at 18. There are several alternatives, which are at least worth considering.

Ways to Build Credit at 18 Years Old

Use a credit-builder loan

A credit-builder loan is essentially a loan that holds the money in a bank account while you make payments. This allows you to build credit easily and doesn’t require a good credit score. Once you’ve made all of the payments, the money is released to you. Credit-builder loans are typically small (think around $1,000) and have short repayment times, usually just a year, so their sole intent is to help you build your credit.

Take out a real loan

Getting a personal loan or financing a car using an auto loan can help you build credit. Just like with any other loan, payments you make are reported to the credit bureaus. Getting a loan can also help your credit because a portion of your score is determined by your “credit mix,” and having an installment loan adds variety once you have a credit card.

Get a credit card

You can get a credit card at 18 by becoming an authorized user on someone else’s account or by applying for your own account. If you have enough independent income to afford monthly bill payments, you can get your own credit card account when you turn 18 years old.

The best type of credit card to get at 18 is a student credit card, assuming you’re in college. Credit cards for students tend to have better rewards, as well as lower rates and fees, than other starter credit cards for people with no credit.

All major credit cards report account information to the credit bureaus each month, so as long as the information shows on-time payments and reasonable credit utilization, you’ll be on your way to building a good credit score.

Report your rental payments

You can arrange to have apartment rental payments reported to the credit bureaus. Some landlords report monthly rental payments to the credit bureaus automatically, but not all do.

If your landlord doesn’t, you can still have your rental payments reported through a third-party service. Some of the top ones are RentTrack and eRentPayment. Paying rent is something you’d have to do each month anyway, so you might as well use it to build your credit, too.

How WalletHub Can Help You Build Your Credit

WalletHub gives you all the tools and information you need to build a good credit score at 18 years old, starting with daily updates to your TransUnion credit report and your credit score for free. WalletHub members also get a personalized credit analysis and customized recommendations for how to take their credit to the next level.

In addition, WalletHub can help you by providing:

• 24/7 credit monitoring to watch out for any suspicious activity
• Budgeting tools to manage your money
• Debt payoff plans to help you become debt-free
• Bill reminders to ensure you don’t miss payments or get negative marks on your credit report

To learn more, check out WalletHub’s guide on how to build credit.