At What Age Can You Start Building Credit?
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At What Age Can You Start Building Credit?

Moumita Basu

Table of Contents

Building credit takes time, but definitely starting at an early age to start building credit will pave a good financial path in the long run. You will get numerous benefits once you have good credit such as cheaper interest rates on credit cards, mortgages, and other loans. When processing rental applications, many landlords also check credit reports.

Credit is one of the basic necessities for a good lifestyle. The majority rely on credit to make payments until they can afford to pay off their debt since they do not always have the money in hand to pay the whole balance for the items they desire in life. So, if you have doubts about at what age should you start building credit? And how to start? Below, we go over the fundamentals of credit and how to start managing your finances responsibly as an adult. Let’s explore the details

What is a Credit Score?

A consumer's creditworthiness is indicated by a three-digit number between 300 and 850 called a credit score. A credit score takes into account a person's debt amount, duration of credit history, loans approved under your name, and payback history.

The American financial system heavily relies on credit history, yet it might take some time to get a sound credit rating. The crucial first step to developing sound financial practices is to develop solid money management skills early in life.

Lenders use your credit score to assess how well you handle your money. Lenders want to ensure they're only lending to those with a history of successfully managing their debts since they assume the risk when providing borrowers with loans and credit cards. Therefore, it is less hazardous for creditors to lend you money the more financially responsible you are. This is due to the higher likelihood of timely debt repayment for borrowers with solid credit records.

What is the Starting Credit Score for Beginners?

The most widely used credit-reporting models start at 300 for base credit scores. Only if you've mismanaged your finances is it possible to start out with a score of about 300. Without using any kind of credit, you can begin to establish a credit history or raise your rating.

At What Age Can You Start to Build Credit?

The best time to start developing credit is when a person turns 18 years old. Many students are either starting college or graduating from high school at this time. Many fresh grads are deterred from obtaining credit cards, but they can start building credit if they use their cards responsibly.

There are many things parents can do to help their children get ready for this milestone even though the minimum age to obtain a credit card and build a credit score is 18. After all, establishing credit while still a minor is still doable.

What is the Importance of Building Credit Score at an Early Age?

Building credit is crucial if you want to apply for loans, credit cards, and routine purchases like phone and apartment leases. But there's usually a catch: you need to have a solid credit history to be approved for a line of credit.

Having good credit means more than just being able to make purchases with a credit card. You'll need to be able to rely on your credit history as a fully independent adult for everything from getting a telephone and utilities in your name to being eligible for the best car insurance rates. Your application's acceptance will be heavily influenced by your credit history. It will also influence if you must make additional security deposits and how high your interest rates will be.  That’s why it's crucial to start early to build credit.

Important Tips on Building Credit

For the most part, you must be at least 18 years old and be employed or a student to apply for a credit card or loan, two of the most common ways for people to establish credit. Here are some of the best practices you can adopt at an early age to start building credit:

  • Become an Authorized User:

Even though you might not be eligible to apply for most credit cards at age 18, you could still build credit by adding yourself as an authorized user on a friend's or family member's credit card account.

The three primary credit bureaus—Equifax, Experian, and TransUnion—receive information about authorized users from a large number of major credit card providers. The primary account holder's age and credit card usage will help your score. For instance, your score will benefit from the primary cardholder's solid financial management if they have had the card for five years, have kept a low balance, and made payments on time.

Note: But hold on, pick your primary cardholder carefully. If the borrower has a history of bad money management or missed payments, it will hurt her credit score.

  • Get a Secured Credit Card:

Depending on the amount of the security deposit, a secured credit card gives the user a set amount of available credit. For instance, if you put down a $500 deposit, your credit line will be $500. Because secured credit card issuers frequently disclose your information to credit agencies, these cards are a useful tool for people without a U.S. credit history to establish credit.

Once you start establishing credit, try to make a habit of checking your score frequently. Each of the three major credit bureaus must provide you with a free credit report once a year. You can identify areas that can enhance your credit score and maintain track of them by monitoring your credit. Regularly review your accounts to ensure that everything is accurate, and bring any discrepancies to the credit bureaus' notice. Applying for Zolve Credit Builder Card is a wiser option at an early age to start building credit as it does not require any minimum deposit and reports to all the credit bureaus.

Frequently Asked Questions(FAQs)

How old do you have to be to start credit?

A credit score is typically only available to those over the age of 18, but minors may have access to credit reports. Consider adding your child as an authorized user to one or more of your credit cards if you want to establish their credit before they reach 18. Although there is no set minimum age for adding a child as an authorized user, you should check the rules of your credit card company.

What is the best way at an early age to start building credit?

One of the best ways to build credit at an early age is to get a secured credit card. Choose any secured credit card with no or minimum deposit. Zolve Azpire Credit Builder Card is one of the best credit cards for beginners to build a good credit score.

How can a minor establish credit?

Minor can establish credit by becoming an authorized user of one or more of adult credit cards. Although there is no set minimum age for adding a child as an authorized user, checking the rules of the credit card company if you want to add your minor is advisable to avoid any confusion in the future.

How do I establish credit if I don't already have any?

If you have no credit history, you should accomplish these three things.

  • Obtain user authorization:  Becoming an authorized user on a family member's or friend's credit card is among the quickest and simplest ways to establish credit.
  • Apply for a secured credit card.
  • Earn points for promptly paying your phone and utility bills each month.

Which card establishes credit quickly?

Building credit should be your long-term goal. With responsible financial habits, you can build credit fast. The Zolve Azpire Credit Builder Card, which has no annual fee and is open to those with bad credit, is the greatest credit card for quickly building credit. Additionally, Zolve sends monthly account information to the credit bureaus that will build your credit history.