Building Credit Early: Start Before 18

The credit you build now follows you for decades

Why Credit Matters

Your credit score affects:

Interest rates on car loans, mortgages, credit cards
Apartment applications — landlords check credit
Insurance rates — some insurers use credit data
Job applications — some employers check credit
Cell phone plans — post-paid plans require credit checks

A good credit score can save you tens of thousands of dollars over your lifetime in lower interest rates alone.

The best time to start building credit? Before you need it.

The Credit Score Basics

What's a Credit Score?

A three-digit number (300-850) that represents how reliably you repay debt.

Score Range	Rating	What It Means
800-850	Exceptional	Best rates, easy approvals
740-799	Very Good	Great rates, most approvals
670-739	Good	Decent rates, standard approvals
580-669	Fair	Higher rates, some denials
300-579	Poor	Difficult to get credit, high rates

What Makes Up Your Score

Factor	Weight	What It Means
Payment History	35%	Did you pay on time?
Credit Utilization	30%	How much of your limit are you using?
Length of History	15%	How long have you had credit?
Credit Mix	10%	Types of credit (cards, loans)
New Credit	10%	Recent applications/accounts

Key insight: The two biggest factors — payment history and length of history — both favor starting early.

How Minors Can Build Credit

Minors can't open credit cards in their own name. But there are legitimate ways to start building credit before 18:

1. Become an Authorized User

What it is: A parent adds you to their credit card account. You get a card with your name, but the parent is legally responsible.

How it builds credit: The card's payment history appears on YOUR credit report, not just the parent's.

Pros	Cons
Builds credit without being 18	Parent's mistakes hurt your score too
No credit check for you	Some cards don't report authorized users
Learn with training wheels	Requires parent with good credit
Spending limits can be set	Still need to learn responsibility

Important: Not all cards report authorized users to credit bureaus. Before adding your child, call the credit card company and confirm they report authorized users.

2. Credit-Builder Loans

Some banks and credit unions offer small loans specifically designed to build credit:

You "borrow" money that goes into a savings account
You make monthly payments
When paid off, you get the money back
Payments are reported to credit bureaus

These are available to minors through some institutions (with a parent co-signer) and to young adults on their own.

3. Student Credit Cards (at 18)

Once you turn 18, you can apply for a student credit card:

Lower credit limits (often $500-1,000)
Easier approval for those with no credit history
May require proof of income or a co-signer if under 21

The Authorized User Strategy

This is the most common path for teens to build credit. Here's how to do it right:

Step 1: Find the Right Card

The parent's card should have:

✅ Long history (older is better)
✅ Low utilization (using less than 30% of limit)
✅ Perfect payment history (no late payments)
✅ Confirmed authorized user reporting to all three bureaus

Step 2: Set Ground Rules

Before adding a teen, families should agree on:

Spending limit (can often be set lower than the card's actual limit)
What the card can be used for
How and when it will be paid off
Consequences for misuse

Step 3: Use It Wisely

The teen should:

Make small, regular purchases
Never spend more than they can pay off
Understand they're not building debt — they're building history

Step 4: Monitor Progress

After 3-6 months, the authorized user can:

Create a Credit Karma or similar account (free)
Check their credit score
See the card appearing on their credit report
Verify the positive payment history is being recorded

What ISP Teaches

The Credit Building Challenge

ISP students work through a structured approach:

Learn — Understand what credit scores are and why they matter
Research — Check if you're already an authorized user (many parents add kids without telling them)
Discuss — Talk with parents about the authorized user strategy
Act — Become an authorized user on a parent's card (if appropriate)
Monitor — Set up free credit monitoring and track progress
Teach — Create a "You Teach" video explaining credit scores to other teens

Completing the Challenge Earns:

💳 Credit Starter Badge on your MyPath profile
OVR boost in the Financial Skill Tree

At 18: Your First Card

When you turn 18, you can build credit independently:

Secured Credit Cards

You deposit money (usually $200-500) as collateral
Your credit limit equals your deposit
Works like a regular credit card
Reports to credit bureaus
After 6-12 months of good history, you can often "graduate" to an unsecured card and get your deposit back

Student Credit Cards

Designed for students with limited credit history
Lower credit limits
Often have educational resources built in
May offer rewards (cash back, points)

The Golden Rules

No matter which card you get:

Rule	Why It Matters
Pay in full every month	Avoid interest charges, prove reliability
Stay under 30% utilization	Using $300 of a $1,000 limit is the max
Never miss a payment	One late payment can hurt for years
Don't open too many accounts	Each application is a small ding
Keep old accounts open	Length of history matters

Common Credit Mistakes to Avoid

Mistake	Why It's a Problem	What to Do Instead
Waiting until you need credit	No history = denied or high rates	Start building at 15-16
Maxing out cards	High utilization crushes score	Keep under 30%
Missing payments	35% of your score is payment history	Set up autopay
Closing old accounts	Hurts length of history	Keep first card open forever
Applying for too many cards	Each application is a hard inquiry	1-2 cards is enough to start
Ignoring your credit report	Errors go unnoticed	Check free reports annually

FAQ

Q: Can being an authorized user hurt my credit?

A: Yes, if the primary cardholder misses payments or carries high balances. That's why it's important to only be added to accounts with good history. You can also be removed at any time.

Q: At what age can I become an authorized user?

A: There's no legal minimum age. Some card issuers have their own policies (often 13-15 minimum), and some have no minimum at all.

Q: Will checking my credit score hurt it?

A: No. Checking your own score is a "soft inquiry" and doesn't affect your credit. Only credit applications ("hard inquiries") have a small negative effect.

Q: How long does it take to build a good credit score?

A: From zero, you can establish a "good" score (670+) in about 6-12 months with proper authorized user status or a credit-builder product. An "excellent" score takes longer — typically 3-5 years of consistent history.

Q: What if my parents have bad credit?

A: Don't become an authorized user on a struggling account. Instead, wait until 18 and start with a secured card or credit-builder loan on your own.