How to Build Credit When You Turn 18


As young people reach the age of 18, they often start their adult lives with no credit history whatsoever. As far as the credit bureaus are concerned, people with no credit history don’t exist – and so anyone considering them for a loan or credit application will have no information by which to judge them. Credit and loan applicants with no credit history are often rejected because the creditors can’t determine the level of risk.

The good news? Young adults with no credit history are starting with a blank slate, and can use good credit practices to start building good credit immediately.

So how can young people start building credit when they have none? The best bet is credit cards:

Using Credit Cards (Wisely)

Young people today are somewhat distrustful of credit cards. Nothing wrong with that – maybe they’ve heard the horror stories of people who have racked up unmanageable amounts of credit card debt, or the 2008 financial crisis left them skeptical of financial institutions.

The tendency is to trust debit cards and cash purchases that are tied to real money.

Thing is, debit and cash purchases don’t build credit at all. If you want to build credit, you’ve got to play the game and use credit cards.

The best way to do this is by using a credit card similarly to how you would use cash – only make purchases on a credit card you can pay off at the end of the month with real money. By paying off the balance on time and in full each month, you’re building your credit but in a way that leaves you free of excessive debt.

Starting Credit Card Activity

So you know the importance of using credit cards to build your credit history, but you can’t qualify for a quality credit card with a good interest rate and credit limit right away. The following options are great for young people who need to build credit history:

  • Secured Credit Cards: Secured credit cards are basically credit cards tied to a security deposit, which limits the risk to credit card companies. When you open a new secured credit card, you have to put down a certain amount of money that is tied to your credit limit.

Just like a normal credit card, however, you make monthly payments and your activity is reported to the credit bureaus. Secured credit cards are a great way to start credit activity while protecting you from overspending.

  • Piggybacking: If you anticipate having trouble qualifying for credit, a responsible family member can add you to an account of theirs – typically a credit card – as an authorized user. This allows you to “piggyback” off their credit usage, and as they built their credit, so will you. You don’t even have to use the credit card to get this benefit – although, to establish good credit habits, you could start using it for purchases (approved by the family member) and then paying those off.
  • Store Credit Cards: Many retail stores offer credit cards specifically for use in their locations. If there is a store you frequent often – think groceries or other essentials – you should look into options for store credit cards there. While they don’t always have great interest rates, if you already shop there and can pay off the balances immediately, it’s a good way to build credit without having to change your spending habits too much.


When you’re just beginning to build your credit, credit cards are the simplest way to start. The options we’ve outlined above often have a low barrier to entry and are lower risk than sketchy, “pre-approved” credit offers you see on college campuses or in your mail. While you have to play the credit game to start building credit, there’s no reason to get burned. When building your credit, you can start small and establish good practices by paying off your balances month-to-month, in full and on time.

Related Articles:

6 Ways to Build Credit Even If You Don’t Believe in Credit Cards

24 Things You Need to Know to Build Credit 

19 Easy Ways Baby Boomers Can Build Their Credit

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