7 Proven Expert Tips – Forbes Advisor

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A good credit score can help you save a lot of money on interest and charges. But when you first become an adult, you are likely to have little or no credit history. This means that you may have trouble qualifying for a loan or renting an apartment without a co-signer. To qualify for a loan on your own or to improve your chances of getting lower interest rates, you need to take some time to learn how to get credit at 18.

We will cover the basics of how credit scores and reports work and give you some tips on how to build your credit.

1. Learn the basics of credit scores and reports

Your credit score is calculated based on the information in your credit reports. Understanding how both work is the first step in learning how to build and maintain your own credit.

Credit scores

Your credit score is a three-digit number used by lenders to determine how risky you can be as a borrower. The higher your score, the more likely you are to qualify for the best interest rates and loan terms. Lenders often use the FICO credit rating model when considering your loan application. The most popular version of this model has a rating system ranging from 350 to 850. Your rating is calculated based on the following five factors.

The payment history and the amount of debt you owe — or the credit rating ratio — are the most important credit factors, accounting for 65% of your score. When building credit at 18, keep in mind that a positive payment history and low debt balance can help you improve your rating and gain access to credit in the future.

Behind these two credit factors, the length of your credit history accounts for 15% of your score — the average age of your credit bills — and is the third most important factor. Your credit balance takes into account the different types of credit bills you have (student loans, personal loans, credit cards, etc.). The last factor, the new credit, factors on how many times you have applied for credit recently.

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Credit Reports

A credit report is your financial statement card — it gives the lender a summary of your payment history, list of credit bills and outstanding balances. While a positive credit history can improve your credit, a negative credit history can hurt you. For example, a payment overdue by more than 30 days usually refers to one of the three major credit bureaus — Experian, Transunion, or Equifax.

When a late payment appears on your credit report, a lender may consider you a more risky borrower. Negative comments may remain in your report for up to seven years, but their impact diminishes over time.

2. Check your credit score and report

To track your progress, you need to check your credit score and credit reports. You can check your credit score for free using a free credit score website or through your credit card provider.

In addition, you can check each of your credit reports for free at AnnualCreditReport.com. Normally, you can only check it for free once a year. However, due to Covid-19, you can receive free weekly credit reports until April 20, 2022.

When checking your credit reports, make sure the information is accurate and complete. Be sure to check all your reports, as lenders may not report information to all three credit bureaus. If the information in one of your reports is inaccurate or incomplete, challenge it with the credit bureau that has it in your report.

3. Become an Authorized User

One way to add payment history to your report is to ask someone with a good credit history to add you as an authorized user to their credit card. When they add you, if their positive payment history is added to your credit report, it could improve your credit score.

However, the downside of this strategy is that if the person who mentions you as an authorized user makes a late payment, it could negatively affect your rating.

4. Open a secure credit card

If you want to be responsible for your own credit card, choose to open a secure credit card. A secure credit card is a card that requires a guarantee in exchange for opening a line of credit. The amount you deposit becomes your credit limit — the maximum amount you can charge. Once you make a deposit, a lender is more likely to approve your application if you have little or no credit history.

If you repay the amount you borrowed on time, you will usually get your deposit back when you cancel the card. However, if you fail to pay your credit card bill on time, you run the risk of receiving your security deposit from the lender.

5. Make timely payments

Since payment history accounts for 35% of your FICO score, it is important that you pay your bills on time. This means paying off all your bills on time, not just your credit bills, every month. If you fail to pay your bills, you run the risk of a company reporting late payment to the three major credit bureaus.

Once a company reports a late payment, it can negatively affect your rating for up to seven years. To avoid this, sign up for automatic payment. You can even check your accounts monthly to make sure the right amount will be charged if you are afraid you will be overcharged.

6. Keep your credit card balances low

To improve your score, keep your credit usage — the amount of credit you use compared to your credit limits — low. The general rule of thumb is to keep the credit utilization rate below 30%. This means that if your credit card limit is $ 1,000, try not to borrow more than $ 300 at a time.

If the use of your credit becomes too high, this can negatively affect your credit score, because the amount you owe corresponds to 30% of your score.

7. Get a loan

If you get a student loan, personal loan or car loan and repay it on time, this can help you build credit. However, if you do not need a loan, do not take out these types of loans for the sole purpose of generating credit. Instead, divert your thinking to good things in life. A credit line is specially designed to help you build credit.

Instead of borrowing money and repaying the balance over time, you will deposit a certain amount of money into one account each month. At the end of the term of your loan, you will receive your money sometimes with interest paid, minus commissions.

Although home equity loans are less common than traditional loans, you can find them at your local credit union or online lending market.


Gaining access to credit when you first become an adult can be a challenge due to a lack of credit history. To solve this problem, follow some of the above steps to start building credit at 18. Remember that paying your bills on time and keeping your credit usage low are two of the most important things that you can do to build credit. Although you will not build a good credit score overnight, adopting good credit habits now can save you thousands of dollars over the course of your life.

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