When an individual turns 18, they may have limited or no credit history, which can make it difficult to determine their credit score. Credit scores are calculated using information from an individual’s credit report, which is a detailed record of their credit history, and a credit report typically requires a certain amount of credit history in order to generate a credit score.
If you are 18 and have limited or no credit history, you may not have a credit score yet. However, there are steps you can take to establish a credit history and begin building a credit score. Some tips for building credit at 18 include:
- Get a credit card: One way to establish a credit history is to get a credit card and use it responsibly. Choose a credit card that is designed for individuals with little or no credit history, such as a secured credit card or a student credit card. These types of credit cards often have lower credit limits and may require a deposit, but they can help you establish a credit history and build a credit score.
- Use your credit card responsibly: When using your credit card, make sure to pay your bills on time and avoid carrying high balances. Credit utilization, which is the amount of credit you are using compared to your credit limit, can impact your credit score, so it is important to keep your balances low. Aim to use no more than 30% of your credit limit.
- Be selective about credit: Avoid applying for too much credit at once, as this can have a negative impact on your credit score. Instead, be selective about the credit accounts you open and consider the potential impact on your credit score.
- Monitor your credit report: Regularly reviewing your credit report can help you identify any errors or issues that may be impacting your credit score. You are entitled to receive one free credit report from each of the three major credit bureaus every year, so be sure to take advantage of this resource.
By following these tips and using credit responsibly, you can begin building a credit history and credit score at 18. It is important to manage your credit responsibly in order to maintain a good credit score and improve your financial standing.