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How to Start Building Your Credit Score at 18

Lenders prefer borrowers with good credit scores. It’s a fact of life — and some lenders deal only with folks who have good credit. 

But loans aren’t the only financial products your credit score may have a bearing on. Poor credit could mean higher car insurance and other insurance premiums, difficulty getting a new bank account, and it could even make getting a meaningful job difficult. 

That creates a bit of a conundrum. In order to have a good credit score, you must have a credit history, but it’s nearly impossible to build any credit history before you’re 18 years old. That means as a young adult, you may have to contend with higher interest rates and ask family and friends to be co-signers every time you borrow money. 

The solution? Using credit-boosting tools like the Cleo Credit Builder account, Capital One’s secured credit cards, or a credit-builder loan from Chime. With responsible use and a little time, you’ll find yourself on the path to better credit — and to meeting your financial goals ahead of schedule. 

How to Start Building Your Credit Score at 18

Building credit is all about a solid credit history, which takes some time. The earlier you start, the better. So if you can start as soon as you turn 18, you’ll be ahead of the curve. 

There are several things you can do to start building credit. In fact, there’s a wide range of financial products designed specifically for that purpose.

1. Understand How Credit Scores Work

When you understand how credit scores work, you’re better equipped to improve your own. Some of the most important credit score calculation factors include:

  • Payment History. Creditors want to know that you’ll pay them back as agreed. So your credit score improves when you maintain a good payment history consisting of regular, on-time payments. 
  • Age of Credit Accounts. As you keep accounts in good standing, those accounts will age. The longer you maintain your credit accounts, the more they work to improve your credit score. 
  • Account Mix. Creditors like to see that you’re responsible for multiple different types of credit accounts. Having a mix of three or more account types like credit cards, auto loans, and personal loans helps increase your credit score. 
  • Debt-to-Income Ratio. If you rack up more debt than your income can afford to pay back comfortably, your score will start to fall. It’s important to keep your total debt significantly lower than your income to improve your credit score. 
  • Credit Utilization Ratio. When consumers near their credit limits on their credit cards, it shows lenders that they may be headed into tough financial times.  If not, they’re likely making poor financial decisions. You should keep your credit utilization ratio low by never spending more than 30% of your total credit limit on credit cards. 

2. Open a Cleo Credit Builder Card

Next start boosting your credit with a Cleo Credit Builder card. There is no credit check for approval, so you don’t have to worry about being declined. Other benefits of a Cleo Credit Builder account include:

  • Reports to All Major Credit Bureaus. Cleo reports your account activity to TransUnion, Equifax, and Experian. 
  • You Choose Your Available Credit. When you open the account, you’ll be asked for a security deposit. That security deposit becomes your credit line, which gives you control over the amount of your available credit. 
  • Accepted Wherever Visa Is. Swipe your Cleo Credit Builder card anywhere Visa is accepted. 
  • No Interest. You don’t have to worry about high interest rates here. The Cleo Credit Builder card doesn’t charge interest. 
  • Earn Rewards. Earn cash back at some of the most popular merchants. 
  • Cash Advance. Access a cash advance credit line as high as $120. 

3. Open a Starter Credit Card

As mentioned above, you can’t build credit without a payment history, and a payment history requires some type of loan. One of the fastest ways to push your credit score upward is to open your first credit card and use it responsibly. 

If you’ve already tried to open a new credit card account and have been declined, don’t worry. There are plenty of cards that are easy to get and can have you well on your way to a good score. 

Student Credit Card

Some credit card issuers offer cards specifically designed for college students who are working through their credit-building journey. These cards are easy to get, even if you don’t have a credit history, and most don’t require security deposits. 

One of the most popular student credit cards is the Capital One SavorOne Student Cash Rewards credit card. You can earn up to 3% cash back when you use it to build your credit. 

Secured Credit Card

Another option to get a new credit card, even with limited to no credit history, is to take advantage of secured credit card offers

When you apply for these cards, you make a security deposit with the credit card company that later becomes your credit limit. Just be aware that you will have to pay interest on secured cards. 

Nonetheless, if you use your credit card responsibly, you’ll typically get your security deposit back after about a year (maybe sooner). At this point, your card will automatically become an unsecured credit card and you may be able to qualify for other offers without security deposits. 

4. Become an Authorized User

Another way to start building your credit history is to become an authorized user on someone else’s credit card, though it’s important to make sure that person pays their bills responsibly. 

That’s because when you become an authorized user, the credit card company will generally report that account’s activity on your credit report. As long as the card is used properly by you and the original borrower, it has the potential to improve your credit score over time. 

Of course, you can’t just walk up to anyone and ask to be an authorized user on their credit card, but you can ask a family member. Your parents might be so delighted that you’re working to build your credit that they’ll feel they have no choice but to say “yes!”

5. Get a Credit Builder Loan

A credit builder loan — offered by companies like Chime — is like a personal line of credit or another personal loan, but with a twist. With most loans, the lender gives the borrower money to use on the spot, whether that be to buy a car, house, or just pocket cash. In return, the borrower makes monthly payments to pay the loan off. 

A credit builder loan follows those steps, but backward. The borrower decides the loan amount and starts making payments to the lender immediately. Once the term of the loan is over, the lender gives the value of the loan to the borrower. 

So, although it’s called a credit builder loan, it acts more like a savings account with a maturity date that’s designed to improve your credit score. 

6. Keep Your Credit Utilization Low

As mentioned above, your credit utilization ratio is one of the factors that make up your credit score. That’s for good reason too. If you’ve handled your finances well, and have the money you need to live, chances are you’ll never spend too much money on your credit cards. 

On the other hand, if you get into a pickle, one of the first places you might look for excess funding is your credit card. This can lead to spending near, up to, or even over your credit limit. 

One of the best ways to improve your credit over time is to keep your credit utilization below 30%. That means if you have a secured credit card with a $500 credit limit, you should never spend more than $150, or 30% of $500, on that card. 

7. Make Payments on Time

Your record of on-time payments is the single most important factor credit reporting agencies use when calculating your credit score. Your payment history typically makes up 35% of your score. 

So when you get your credit card bill, or any other bill for that matter, it’s important to make the payment on or before the due date. Even a single late payment can cause significant damage to your credit score and undo months or years of credit-building work.

8. Pay Off Your Credit Card Balance Each Month

One surefire way to reduce your risk of late payments is to make a habit out of paying your credit card balance off entirely each month. Not only will doing so help you avoid late payments, but it also shows credit reporting agencies and lenders that you have a habit of making higher-than-minimum payments — a clear act of financial responsibility. 

Paying your credit card balances off each month does more than help your credit score too. 

Credit card companies only charge interest when borrowers carry balances over from month to month. That means, if you pay the entire balance off each and every month, you’ll avoid interest charges, which can be exorbitantly high on credit-building credit cards. 

9. Consider Applying for Other Credit-Boosting Options

Your Cleo Credit Builder card is a great way to start boosting your credit. As your credit score improves and your chances of qualifying for other credit products increase, consider taking advantage of the other options you may have access to. Some to look into include:

  • Secured Loans. These include auto loans, motorcycle loans, boat loans, or any other loan with a valuable product that acts as collateral. If you don’t pay, the lender repossesses the product. You may need to bring a co-signer on to increase your chances of approval for these types of products.
  • Student Loans. Student loans are designed to help cover the cost of college education including tuition, school supplies, and even living expenses while you’re in school.

No matter what type of loan you get your hands on, adding to your credit mix has the potential to improve your score over time. However, it’s important to make sure whatever loan you get is one you need for more than improving your credit. For example, don’t apply for a student loan if your parents are already paying for your education expenses.

10. Review Your Credit Report Regularly

Your credit changes over time, and it’s important to be privy to those changes. In some cases, a change to your credit report may be inaccurate or completely false. These changes can damage your credit, even if they’re inaccurate. 

Keep a close eye on your credit report by taking advantage of free credit score providers like Credit Karma or Credit Sesame. You can also access your full credit report once per year at

As you watch your credit score improve, give yourself a pat on the back. Maybe take yourself out for your favorite meal, finally buy that new tech gadget you’ve been wanting, or get your nails done. You’ve worked hard; you deserve a treat. 

On the other hand, if you find anything inaccurate when you check your report, dispute it immediately to prevent it from causing any undue damage. 

Final Word

The truth is, improving your FICO score or any other of a number of different credit scores is a process that takes time, a bit of effort, and a willingness to commit to financial responsibility. Nonetheless, family, friends, and even financial institutions are often willing to help you along your credit journey. 

Start with a Cleo Credit Builder card, which can boost your credit even if you don’t have much of a credit history. Then stick to your plan, follow the tips above, and take advantage of the tools and resources available to you. Better scores and lower interest rates await.

Joshua Rodriguez has worked in the finance and investing industry for more than a decade. In 2012, he decided he was ready to break free from the 9 to 5 rat race. By 2013, he became his own boss and hasn’t looked back since. Today, Joshua enjoys sharing his experience and expertise with up and comers to help enrich the financial lives of the masses rather than fuel the ongoing economic divide. When he’s not writing, helping up and comers in the freelance industry, and making his own investments and wise financial decisions, Joshua enjoys spending time with his wife, son, daughter, and eight large breed dogs. See what Joshua is up to by following his Twitter or contact him through his website, CNA Finance.
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