How can I increase my credit at 18?

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There are many ways to start building credit when you’re young and with no credit history. With a blank canvas to work from, you can ease the transition into adulthood by learning to manage your credit responsibly at a young age.

Understanding credit and why it matters

Having a solid credit history and credit score are the keys to getting approved for credit cards, loans, mortgages, etc., making it easier to access the big purchases often needed in life. Even better, having good credit allows you to qualify for better rates and terms on these accounts.

It’s not all credit impacts either. Your credit can play a role in how much you pay for car insurance, your ability to find a job or rent a home, and whether you qualify for utilities or a phone contract.

Creditors, lenders and others who use your credit to make decisions will look at your overall credit profile, but will pay particular attention to your credit score – a three-digit number that provides insight into your ability as a borrower at any given time. time. FICO is the most common credit score in circulation and the one used by most lenders. Your FICO score ranges from 300 to 850, with anything 700 and above generally qualifying as “good.”

Credit score providers are a bit secretive about what exactly goes into calculating your score, but they do provide some insight. the five main factors that go into your credit score are: payment history, length of credit history, amounts due, combination of credit accounts and new credit.

Of these, your payment history and amounts owed — which largely deal with your credit card balances over their limits — make up more than 65% of your score, making them by far the two highest. important. This means that focusing on these two areas is also the best way to build credit.

Ways to Build Credit at 18

In order to establish credit, you must open credit accounts and manage them responsibly. The problem is that lenders and creditors have no way of evaluating young adults who have no credit history, so it can be difficult to get an approval. Fortunately, there are a few proven methods you can use to establish and grow your credit at 18. Here are a few to explore:

  • Authorized user: You can become an authorized user on someone else’s credit card. In this arrangement, you are added to an existing credit card and can benefit from its activity and seniority without having to be responsible for usage or payments. The primary account holder can continue to use it normally and you can benefit from its positive use.
  • Secure credit card: If you don’t benefit from a traditional credit card, secured credit cards are generally easier to obtain. A secured credit card requires you to make a deposit up front, which becomes your credit limit. You can use it like a normal credit card, so be sure to keep your balance low and make all payments on time. After using it responsibly for a while, you may be able to upgrade to a regular, unsecured card that doesn’t require a deposit.
  • Reporting rent payments: If you are a tenant, you can sign up for a service that reports your rent payments. This gives you the credit you deserve, as rent is a big expense to manage. Sign up for free with our trusted partner to report your rent payments.
  • Get a small loan: Taking out a small personal loan, student loan, or credit loan gives you a chance to successfully tackle an installment credit account. Although some of these may be harder to obtain than a credit card, you can ask a parent or guardian to co-sign for you.

A car loan to start

Building credit at 18 is a great way to set yourself up for success later in life. Remember to take your time, get things under control, and make all your payments on time.

If you need a car and want to build credit, a car loan can help you do both. AT Auto Express Credit, we connect consumers facing unique credit situations with local dealers who specialize in financing. See what we can do for you by filling out our free form car loan application form today.

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