At What Age Can You Start Building Credit?

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Contributor, Benzinga
July 10, 2023

The earlier you start building your credit score, the better. This three-digit number impacts your loan rates, rent applications and various expenses in your life. Lenders, creditors and other entities use this information to assess your ability to manage financial obligations and other responsibilities. While it’s optimal to get started as early as possible, how soon can someone build their credit score? This guide will detail when you can get started, ways to build your score and why you should get started.

At What Age Can You Legally Start Building Credit?

Most people start building their credit when they are 18 years or older. At this age, you can apply for more loans and credit cards. Age-related credit laws prevent teens from taking out expensive loans and other financial products before turning 18 years old. However, it is possible to build credit before turning 18.

5 Ways to Start Building Credit Early

Younger consumers have several ways to build their credit before turning 18. Here are some strategies to consider.

1. Apply for a Student Credit Card

Student credit cards are more accessible than regular credit cards. Your university may offer one of these cards through a partnership with a financial institution. Most credit card issuers will want to see that you make a consistent income, and a co-signer may be necessary to obtain one of these cards.

2. Apply for a Small Loan

Getting a small loan gives you a low-risk way to borrow money and build your credit score over time. While borrowing thousands of dollars out of the gate is risky and can hurt your credit score if you miss payments, a $500 loan is more feasible. Some small loans are specifically designed for people seeking higher credit scores. These credit builder loans have small amounts — usually $500 to $1,000 — and have six- to 24-month terms. Each on-time payment will add points to your credit score. 

3. Buy a Car

A car is a good investment that allows you to travel to more locations. You can use a car to get back and forth from work and school. An auto loan can also build your credit as you make on-time payments. While cars can be good investments for your lifestyle and career, the asset itself will depreciate over time. Instead of chasing a new, flashy car, drivers may want to consider used vehicles that still get the job done and have much lower price tags.

4. Automate Your Payments

Payment history makes up 35% of your credit score and can heavily impact your interest rates and loan terms. Setting up automatic payments ensures you won’t forget to cover a bill. Some people have enough funds to pay for everything on time, but forgetting to pay on time will still hurt your credit score. Automated payments solve this problem.

5. Pay Bills On Time

Paying bills on time, whether they are reported to the major credit bureaus or not, is essential for financial well-being and a high credit score. Even if the bills do not show up on your credit report, those unpaid obligations can get sent to a debt collection agency. These agencies are a pain to deal with, and the activity will show up on your credit report. Only spend as much money as you can pay back. and monitor your expenses to keep your finances in good condition.

Why Start Building Credit Early

You don’t have to build your credit score. But you won’t get all of the benefits associated with a high credit score. Building credit does not have any downsides and will strengthen your finances. Here are some reasons to build your credit early instead of putting it off.

Good Credit History 

Credit bureaus look at your credit history when assessing your credit score. Building credit now will improve your history and make it easier to maintain a healthy score. The FICO scoring model even has a category that incentivizes a lengthy credit history. The age of your credit accounts makes up 15% of your total score. Keeping an old student credit card open will increase your length of credit history even if you stop using it.

Financial Independence and Responsibility

Building credit early can put you on the road to financial independence. You can only achieve a high credit score with effective money management, patience and discipline. You can become more in tune with your income and how you allocate funds. Learning these lessons while you are young can help you overcome future obstacles.

Good Interest Rates on all Purchases

Banks, credit unions and online lenders want to work with borrowers who reliably pay back debt. Financial institutions offer lower interest rates and better terms to encourage high-credit borrowers to take out a loan with them. Raising your credit score now can help you secure a lower interest rate on a mortgage, auto loan or personal loan. The lower interest rate can help you save thousands of dollars over the life of the loan.

5 Things Parents Can Do To Help Children Build Credit

When a teen turns 18, they have more ways to build credit. But their choices are still relatively limited. Parents can jumpstart their children’s credit-building journey through the following steps.

1. Add your Child as an Authorized Card User

You can add your child as an authorized user before your child turns 18. Adding your child as an authorized user allows them to build a credit history based on how you use your card. You will have to contact your credit card company to add your child as an authorized user.

2. Co-Sign a Loan

Co-signing a loan makes you legally responsible for the loan if your child cannot pay it. This arrangement increases the parent’s risk but also helps the child receive a loan and secure a lower interest rate. The bank will look at your credit history when assessing a co-signed loan. Co-signing a loan for your child can strengthen the relationship, but make sure you let your child know about the importance of paying off the loan and offer some guidance along the way. If your child makes on-time loan payments, their credit score will improve and help them get loans without a co-signer in the future.

3. Help Them Open a Secured Credit Card

A secured credit card is easier to obtain than a regular credit card. Some secured credit cards do not have credit score requirements. Helping your child get one of these credit cards can get them into the habit of managing their money. If your child makes on-time payments for this card, their credit score will go up. These cards require security deposits, and you may want to make that deposit to get your child started sooner.

4. Educate on Financial Literacy

Building credit boils down to your financial literacy. How effectively can you manage debt, increase your income, and avoid lifestyle creep? Teaching your child about money management will put them in a better position when credit card bills and loan payments become due. It’s good to teach your child about the benefits of building credit and what can go wrong if they fall behind on credit card payments.

5. Monitor Their Credit Activity

Keeping an eye on your child’s credit activity can help you see their real-time progress. You can provide guidance based on what you see and reward good behavior with words of encouragement. It is important to let your child know when things are going wrong and how they can improve, but it is just as important to let your child know what they are doing well and commend them for the great things they are doing. Monitoring credit activity also serves another purpose. You can detect signs of identity theft and take action if you suspect fraudulent activity. 

It’s Never Too Early to Build Credit

Building credit now will open more doors in your life. You can qualify for a higher mortgage amount, lower interest rates and save money along the way. The highest credit score you can have is 850. While it is a great aspiration, you will get the full benefits of a high credit score if you get yours up to 800 or higher. Every bit of progress can make it easier to get approved for loans and protect your wealth.

Frequently Asked Questions


Can you start building credit at age 16?


You can start building credit at 16. You can become an authorized user of a parent’s credit card.


How can you help your child build credit?


You can help your child build credit by adding them as an authorized user to your credit  card, helping them obtain a secured credit card and teaching them about money.


What is the best way for teenagers to start building credit?


Teenagers can build credit through secured credit cards, credit builder loans and by being authorized users on their parent’s credit cards.

Marc Guberti

About Marc Guberti

Marc Guberti is a personal finance writer passionate about helping people learn more about money management, investing and finance. He has more than 10 years of writing experience focused on finance and digital marketing. His work has been published in U.S. News & World Report, USA Today, InvestorPlace and other publications.