The short answer: In most cases there isn’t an instant fix for improving your credit score. Building, improving or even repairing credit takes time.
Your credit score is like a snapshot that lenders use to determine your financial trustworthiness. Whether you’re applying for a loan, a credit card, or even renting an apartment, your credit score plays a crucial role in the decisions made about your financial future. But what if you’re in a pinch and need to improve your credit quickly? Can you fix your credit in just a week?
Why Do Credit Scores Take So Long To Update?
How often do you check your credit score? Everyday? If you have, maybe you’ve noticed in the past how long it takes your credit score to update. The credit reporting process is another reason why it would take longer than a week to update your score – it takes a while for lenders, banks, and the bureaus to record your activity.
Here’s what you should consider about the reporting process:
1. There are consistent reporting periods
Creditors typically report your account information to the credit bureaus at the end of each billing cycle. This means that any changes you make to your credit behavior, such as paying off a credit card balance or opening a new account, won’t immediately reflect on your credit report. Instead, you’ll have to wait until the next reporting period for these updates to be included.
2. The bureaus need time to verify your information
Even when creditors submit information to the credit bureaus, there is processing time involved. The credit bureaus need to receive, verify, and process the data before updating your credit report. This process isn’t instantaneous and can take several days to weeks, depending on various factors such as the volume of information being processed.
Additionally, the bureaus have specific schedules for updating credit reports, which may vary depending on factors like the bureau’s workload and the frequency of data submissions from creditors.
3. There’s a lag between when your credit reports update and when your score updates
Even after the credit bureaus update your credit report, there may still be a lag before your credit score reflects these changes. This is because your credit score is calculated based on the information in your credit report. While some credit scoring models may update more frequently, others may only update periodically, resulting in delays in your credit score reflecting recent changes.
4. Not everything is strong enough to impact your credit score
Additionally, your credit score may not change significantly if there hasn’t been much recent activity on your credit accounts. For example, if you haven’t made any new credit applications or incurred new debts, your credit report may remain relatively unchanged.
The Reality of Fixing Credit
While some changes to your credit report may occur relatively quickly, significant updates to your credit score typically take time to reflect accurately. It’s essential to be patient and continue practicing responsible credit habits while waiting for your credit score to update.
While you may not be able to fix your credit in a week, there are some strategies you can try to start improving it immediately:
Always Try to Pay Your Bills on Time
Making on-time payments is one of the most important factors in your credit score. Even a single late payment can have a negative impact, so prioritize paying your bills by their due dates.
Pay Down Credit Card Balances
If you have high credit card balances, paying them down can improve your credit utilization ratio, which in turn can positively affect your credit score.
Check Your Credit Report for Errors
Errors on your credit report can drag down your score. By reviewing your report and challenging any inaccuracies, you can potentially see an impact to your score. You can request a free copy of your credit report from each of the three main credit bureaus at AnnualCreditReport.com .
Become an Authorized User
If you have a trusted family member or friend with good credit, asking to become an authorized user on one of their credit accounts can help boost your score. Just be sure that the primary account holder has a history of responsible credit usage.
Report Rent and Utilities
Rent, utilities, cell phone bills are examples of regular payments you may be making each month that don’t show up on your credit. If you feel confident that you can continue making those payments each month, you can always sign up for a rent and utility reporting service in order to get credit for paying your bills on-time.
The Importance of Patience
Unfortunately, the idea of fixing your credit overnight or even in a week is mostly a myth.
While it’s understandable to want to improve your credit as quickly as possible, it’s essential to approach the process with patience and realistic expectations. By focusing on making responsible financial decisions over time, you can gradually raise your credit score and achieve your financial goals.
As parents, we want the best for our children: health, happiness — and hardy credit. Having a strong credit profile can determine whether your kid gets approved for a loan or how much they’ll pay for car insurance when they’re grown. But establishing credit for someone with no credit history is challenging.
A common workaround is for parents to add their children as authorized users on their credit card accounts. Credit checks aren’t required, and the user can quickly piggyback on the primary cardholder’s credit history. But this arrangement isn’t always the right move. Here’s what to know about the potential limitations of adding your kid as an authorized user and alternative ways they can build credit.
They might be too young to reap the benefits
If you’re hoping to boost your child’s credit before they even learn to tell time, you could face roadblocks. For one, your kid may not qualify for authorized user status. While some card issuers don’t have age restrictions, others require a minimum age of 13 or older.
Even if you can add your child, the issuer may not report their account details to the credit bureaus. Some issuers allow kids as young as 13 to become authorized users but only report credit information for those age 18 and older. It’s wise to ask your credit card company how authorized user arrangements work.
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Misuse can lead to damaged credit
Being an authorized user doesn’t guarantee improved credit. “Same as the primary account holder, it can affect your credit positively or negatively, depending on how the card is used,” says Bruce McClary, senior vice president of membership and communications at the National Foundation for Credit Counseling.
If you have a record of on-time payments and don’t use too much available credit, that can generate or help your kid’s credit score. But your credit and your child’s can suffer if either person uses the account unfavorably.
Ultimately, it’s up to the parent to keep the account in good standing.
“When you add someone as an authorized user, that’s what they are. They’re authorized to use the card but they are not legally bound to pay the bill. You are legally bound to pay the bill,” says Julie Beckham, an accredited financial counselor and financial educator in the Boston area.
You don’t need to give your kid the credit card. As long as the primary cardholder keeps their account open and active, the authorized user’s credit will share the effects. If you give your child the card, set some ground rules. Talk about when it’s OK to use the card, how much they’re allowed to spend and who will make the payments. Some credit card companies let you place spending limits for authorized users.
Authorized user status might not be enough for future lenders
Some lenders don’t take authorized user accounts into consideration when reviewing credit applications or give them much weight. “If you’re a lender and you’re looking at someone and you see the designation that they’re an authorized user rather than the primary account holder, it’s just telling you that this person did not have to go through a credit approval process to have access to that account,” McClary says.
Having an account in their own name puts your kid in a stronger position because it shows they’re equipped to manage payments. You can guide them toward opportunities in adulthood.
“There are credit-builder loans that are available. There are starter credit cards for young adult consumers, where the threshold for approval is a little bit lower. You can also look at options for secured credit cards that require no credit check, but they require a good faith deposit in order to open the account,” McClary says.
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Explore other ways to get your child credit-ready
The best way to set your child up for success is to talk to them about money, Beckham says.
You could look over your credit reports together or explain how many hours you need to work to pay for things like dinners or fun outings.
Encouraging good routines, like doing chores and turning in homework on time, is also important. “They’re transferable habits that can help them in their life financially as they build credit,” Beckham says.
Give your child opportunities to practice managing money before they graduate to credit. Beckham suggests letting kids test the waters with a checking or savings account. “Starting with their own money is always better because there is a sense of ownership and accountability to that,” she says.
This article was written by NerdWallet and was originally published by The Associated Press.
Do you want to learn how to move out at 18 with no credit, little money, or even no money? Here’s what you need to know. There are many reasons for why you may want to move out at a young age – perhaps you have a difficult home life, you want to move somewhere…
Do you want to learn how to move out at 18 with no credit, little money, or even no money? Here’s what you need to know.
There are many reasons for why you may want to move out at a young age – perhaps you have a difficult home life, you want to move somewhere new, or you just want your own space.
I moved out shortly after turning 18 (about a week or so after my 18th birthday) into a rental home, and while I was not prepared at all, I do think being prepared to move out at a young age is extremely helpful. I made many mistakes that led to many, many tears, money wasted, stress, and more.
Today, I want to help you avoid as many problems as you can.
After all, moving out at 18 years old (or any other young age) is already really hard, and there is such a huge learning curve.
Moving out when you turn 18 is a big step into becoming an adult. Even though it can be exciting, moving out for the first time needs to be planned carefully. Before you leave, it’s important to make a plan to make sure you can afford it and stay on your own.
This means finding a job, making a budget you can stick to, and saving money for unexpected costs.
How To Move Out at 18
Below are ways to move out at 18.
Recommended reading: Buying a House at 20 (How I did it)
Make a plan to move out at 18
I highly recommend having a plan if you want to move out at 18 years old.
Moving out at 18 is a big step, and making a plan will help everything go a little more smoothly.
You will want to think about things such as:
Where you will work
How you will pay your bills
If you will live with a roommate or on your own
What your budget will be like
What you’ll do if things get tough, such as if you can’t afford your rent
What you will do for health insurance and medical bills
And so much more.
I will be going further in-depth on many of these below.
Find ways to make money
If you are 18 and want to move out, then you will need to have a stable source of income, of course. There are many options for earning money, from traditional jobs to more flexible side hustles.
A full-time job typically gives you more hours and benefits like health insurance, which are helpful when you’re living on your own. If you have other things going on, a part-time job might be better because it offers more flexibility while still giving you money (but, you may not earn as much money). You can find job openings online, at job fairs, or on community bulletin boards. Jobs like delivering food can be either full-time or part-time, and companies tend to need people.
If you want to make more money, you can side hustle to make extra income – a way to make extra cash that you do alongside your main job. You could freelance by doing things like writing, teaching tutoring lessons, or designing graphics. Or, you could babysit for families nearby, walk dogs, or help people with tasks or errands. These little jobs can add up to a lot of money and give you the flexibility to work when you want.
When I was young and first moved out, I worked full-time at a retail store. I also eventually started a few side hustles (like blogging, freelance writing, and selling stuff online) so that I could pay off my student loans quickly. Living on your own is not easy, especially when you are young and your income is not that high – so side hustles may be needed so that you can make enough money to pay your bills.
Some helpful articles to read include:
Create a budget
When you’re ready to step out into the world at 18, you need a budget. I can’t think of any young adult who would not need a budget.
Budgets are great because they help you keep track of your money coming in and going out. With a monthly budget, you’ll know exactly how much you can spend on different things each month as it helps you see how much money you have and where you might need to cut back on spending.
A budget will help you to figure out if you can afford to live on your own, if you need to have roommates, or if you need to find a cheaper living arrangement.
Making a budget is easy. First, write down how much money you make each month from your job or other places. Then, write down what you need to spend money on each month, like:
monthly rent
food
phone bill
internet
car
fuel
utilities like electrical, water, trash, sewer, gas/propane
car insurance
medical/health
pet care
restaurants
cable, satellite, or any TV monthly subscriptions
household essential items, like toilet paper, trash bags, etc.
and some money for fun stuff too
Knowing your monthly expenses will help you to better manage your money so that you won’t go into credit card debt.
Recommended reading: The Complete Budgeting Guide: How To Create A Budget That Works
Save for the move (and open a bank account)
When you’re getting ready to move out at 18, saving money is obviously very important. If you can help it, I do not recommend moving out with no money saved.
Think about all the costs you’ll face – like rent, your first security deposit, food, and any unexpected things that pop up. You’ll want to tuck away money for this.
How much should you save to move out? A good rule is to save at least three to six months of living expenses. For example, if you spend $1,500 a month, aim to save between $4,500 and $9,000 before you head out on your own.
This will be your emergency fund. An emergency fund is money you save up for unexpected things that might happen. This could be paying bills if you lose your job or if your hours or pay get reduced. It could also cover unexpected expenses like a car repair, medical bill, or fixing a broken window.
An emergency isn’t something like buying a birthday present, a new TV, or going on vacation.
Having an emergency fund is smart because it can stop you from getting into debt you don’t need. Some people rely on their credit cards for emergencies, but that’s not a good plan.
I also recommend getting your own bank account for all of the money you save. It’s a safe place for your money, and it helps you track what you earn and spend. Plus, you’ll need it for things like direct deposit from jobs or paying bills online.
I personally use Marcus by Goldman Sachs for my savings account as they have a very high rate. You can get up to 5.50% at the time of this writing through a referral link bonus. According to this high-yield savings account calculator, if you have $10,000 saved, you could earn $550 with a high-yield savings account in a year. Whereas with normal banks, your earnings would only be $46.
Improve your credit score and history
When you’re moving out of your parents’ home, having a good credit score is super helpful. This is because your credit score and credit history may be used for things like getting approved for an apartment and getting signed up for utility bills.
If your credit score is low, then you may be denied an apartment and even have to pay large deposits to get signed up for utilities (like water and electric).
Here are some important things to know:
Understand credit utilization – This is all about how much credit you’re using compared to how much you have. Try to use less than 30% of your credit limit. Say your card has a $1,000 limit. Aim to spend no more than $300.
Always pay on time – You should pay every bill on time, every time. Even being a little late can hurt your credit score a LOT!
There are other ways to improve your credit, such as by getting a secured credit card or becoming an authorized user on a family member’s credit card.
Here are two really helpful articles I recommend reading:
I also recommend keeping an eye on your credit by checking your score and report. Sites offer free checks, and it’s good to know where you stand. That way, you can fix any mistakes fast.
Think about where you’ll live
When planning to move out at 18, picking where you’ll live is a huge step.
Here are some things to think about:
Think about who you’ll live with. Living by yourself can be expensive so sharing rent and other bills with roommates can save you money, but make sure you choose your roommates wisely. You’ll be sharing your space with them, so it’s important to pick people who are responsible and trustworthy (and will actually pay the bills!).
Try using online tools to compare different areas. You can check things like crime rates, public transportation options, and how close they are to places you need, like grocery stores.
Think about the cost. Can you pay the rent and utility bills every month? Make sure to include these costs in your budget. Sometimes, living a bit farther from popular areas can be cheaper.
For my first home, I rented a very small 400-square-foot home with no real bedroom. But, it was within my budget and next to my college (I lived a few miles away), and surprisingly affordable.
Talk to your parents
When you’re getting ready to move out at 18, it’s important to have a conversation with your parents. This might feel hard or even impossible, but remember that clear communication is important.
I recommend choosing a time to tell them when your parents aren’t too busy or stressed as having this conversation when everyone is relaxed can make it easier for everyone to talk openly.
I think it is also helpful to think about how your parents might feel. If you’re the first to leave the home, they might find it tough. Try to understand their perspective and mention that you’ll stay in touch and visit.
And, be ready to show them your plan. Your parents will want to know you’ve thought things through. If you’ve been saving money, let them know. Talk about your job and how you’re managing to support yourself. It’s good to tell them about the place you’re planning to move into and how you chose it.
How to move out of your parents if it isn’t safe
So, after reading the above, I know that some of you may not have a good home life. You may not feel safe telling your parents that you are moving out.
If that’s the case, then I recommend reading this section.
Sometimes, home isn’t the safe place that it’s supposed to be. If you’re in a tough situation and need to leave at 18 but can’t talk to your parents about it, you’re not alone.
Here’s what you can do:
Find an adult you trust – Look for someone you trust, like a teacher, counselor, or family friend. They can maybe give you support and help you figure out your options.
Plan ahead – Start thinking about where you’ll go and how you’ll support yourself. Look into shelters, transitional housing programs, or staying with a trusted friend or relative.
Know your rights – As you turn 18, you have rights. Learn about your options for housing, education, and employment because there may be resources available to help you.
Stay safe – If you’re in danger at home, prioritize your safety. Contact local authorities or organizations that can help you leave safely.
Take care of yourself – Moving out can be tough, but remember to take care of yourself emotionally and physically, such as by talking to friends, finding support groups, or talking to a counselor if you need to.
Leaving home at 18 without being able to talk to your parents is hard, but it’s not impossible. Reach out for help, make a plan, and remember that you deserve to live in a safe and supportive environment.
Get free stuff for your new home
One of the big challenges of moving out on your own is affording all of the different things that you need.
Luckily, there are ways to get things for free or really cheap.
Some of the top ways include:
Facebook Buy Nothing groups – This is my favorite place to start if you want to get things for free. These groups promote recycling and reusing items instead of throwing them away when you’re done with them. To begin, look for and join a local Buy Nothing group on Facebook. You can search for groups for your city. People list their free stuff all the time, such as furniture, electronics, clothes, and more. You can even make a post asking if anyone has something that you need.
Ask family and friends – Your family and friends might have extra stuff they’re willing to part with. They might even be happy to see it go to a good home – your new home!
Check online platforms – Websites like Craigslist, Freecycle, and Facebook Marketplace can be goldmines for free furniture. People often list items they want to get rid of quickly.
Visit thrift stores and yard sales – Thrift stores and yard sales sometimes offer “free bins” or low-cost items they want to get rid of fast.
Attend college move-out days – If you live near a university, go there on move-out day. Students tend to leave behind perfectly good furniture that’s yours for the taking.
Community centers and churches – These places often have bulletin boards with listings for free items.
Always be safe when arranging pickups, especially with strangers. Always bring a friend or let someone know where you’re going.
Helpful articles:
Handling utilities and bills
Dealing with utilities and bills is a big step in moving out. Utilities are services you need like water, electricity, gas, and the internet.
Before you move, call or visit the websites of local utility companies. You’ll need to set up accounts in your name. This might include a deposit fee, so be ready for that.
I recommend making a list of all your expected bills. Rent, electricity, water, internet, and maybe gas are usually the basics. Add them up to see how much you’ll spend each month.
After you move in, you will want to find out when each bill is due. It’s your job to pay them on time as paying late can lead to extra fees or even getting your services turned off. Some companies let you set up automatic payments, and this means the money comes out of your bank account on its own each month. This can make sure you’re always on time.
You will want to hold onto your bills and receipts. This way, if there’s ever a mistake with a bill, your records will help fix it.
You can save money by being smart about using your services. Turn off lights when you leave a room and unplug electronics that you’re not using. You might also shop around for better deals on services like the internet.
After you get your first set of bills, you will understand why your parents wanted to keep the air conditioning off or why they always asked you to turn the lights off – things can be expensive!
Also, remember that different times of the year will impact your bills. For example, your electric bill will most likely be a lot more expensive in the summer than it will be in the spring or fall.
Maintain your home (housekeeping)
Moving out at 18 means taking on the responsibility of housekeeping. You might be surprised how quickly your new home can become cluttered and get dirty.
Keeping your home nice starts with regular cleaning, and I recommend setting aside some time each day for tasks like washing dishes, making your bed, and tidying up the living area. This way, messes won’t pile up and become overwhelming.
Then, once a week, dedicate your time to deeper cleaning such as vacuuming, mopping floors, cleaning the bathroom, dusting, and doing laundry.
Housekeeping also requires tools and supplies, so you will want to plan your budget to include items like sponges, cleaners, and trash bags.
Make friends in your new community
Moving out at 18 is a big step, and making friends in your new community is important. It can make your new place feel like home. When you move, you might not know many people, but there are fun and simple ways to meet people.
Here are some tips:
Get to know your neighbors – Start with a smile and say hi to your neighbors.
Join local groups or classes – Look for groups that interest you. Love to paint? Find an art class. Enjoy cooking? Maybe there’s a cooking group nearby. Like rock climbing? Go to the local climbing gym. This way, you meet people who like what you like.
Visit community centers – Many towns have a community center. They have activities like sports, games, and events.
Making friends might take time, but it’s totally possible! Just be yourself and be open to talking to new people.
Balancing work and personal life
I’m guessing you will have a lot going on, between trying to work full-time and enjoying your life, and even possibly furthering your education.
I recommend trying to schedule your time so you don’t get too busy. Use a calendar or app to make sure you’ve got time for work, taking care of your place, and doing fun things too.
It’s okay to say no if you’re too busy. If you’re working a full-time job, you might not be able to hang out with your friends all the time. It’s all about finding a healthy balance between earning money and enjoying life. I had to say no to my friends many times because I was simply too busy. If your friends still live at home, it may be hard for them to understand this unless you explain your situation.
Plus, remember to take breaks. When you’re planning your week, set aside some time just for relaxing. Watching a movie, reading, or hanging out in the park are all great ways to unwind and give your mind a break.
Frequently Asked Questions
Below are common questions about how to move out at 18 years old with little money.
How can I move out fast at 18?
To move out quickly, focus on making a steady income and finding affordable housing. Create a budget to manage your expenses and look for immediate job openings or housing options. Saving as much money as you can right now is also super helpful.
How much money should I have saved by 18 to move out?
Aim to save at least 3 to 6 months of living expenses before moving out. This safety net can cover rent, groceries, and unexpected costs, giving you financial stability as you start on your own.
Can you move out at 18 while still in high school?
Yes, you can move out at 18 while in high school, but make sure you have a support system in place. Balancing school responsibilities with living independently can be very hard.
How to move out at 18 with strict parents?
When moving out at 18 with strict parents, communicate your plans clearly and respectfully. Prepare a well-thought-out plan to show them you’re serious and capable of managing your own life.
Can your parents not let you move out at 18?
When you turn 18, you’re legally an adult in most places, and you can decide to move out even if your parents don’t agree. However, it’s important to respect their opinion and explain your reasons. There are some places where you have to be older, so make sure you do your research.
Do I have to tell my parents I’m moving out?
While you’re not legally required to inform your parents in most places, it’s nice to talk about your decision with them, as transparent communication helps maintain a positive relationship after you leave.
Can I move out at 18 without parental consent?
Yes, in most places, at 18 you’re legally permitted to move out without parental consent. You will want to make sure this applies to your local area.
What things do you need when moving out of your parents’ house?
There are many things that you will need to move out of your parents’ house such as a bed, blanket, pillow, kitchen supplies, towels, a place to eat, a dresser, cleaning supplies, groceries, and more.
Is it realistic to move out at 18?
It is realistic to move out at 18 if you have a reliable income, a budget, and a plan for handling responsibilities. You will want to be as prepared as possible to move out at a young age because there will be many hurdles thrown your way, most likely.
How To Move Out At 18 – Summary
I hope you enjoyed this article on how to move out at 18 years old.
It’s really important to have a plan for a successful move when you are just 18 years old.
You’ll need to find ways to earn money regularly, like getting a job and even doing extra work on the side.
Having savings in the bank and an emergency fund will help you handle unexpected expenses without ruining your plans.
There are also many other things to think about, such as the cost of living, utility bills, your credit score, and more.
I moved out when I was just 18 years old, so I completely understand where you are coming from. I had no financial help from my parents and found and did everything on my own – from making money to finding a place to live, making all of my own meals, and more. It was hard, but it was what needed to be done.
Do you plan on moving out soon? Do you have any questions for me on how to move out at 18?
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
An authorized user is an individual added to a credit card by the owner of the account or primary cardholder. The authorized user, also referred to as the additional cardholder, can make purchases using the credit card, although the responsibility to make payments falls on the primary cardholder.
Building credit from scratch can be a difficult task, especially for those with limited credit knowledge. One way to get your feet wet with credit is by becoming an authorized user on someone else’s account. As an authorized user, you can leverage someone else’s positive credit habits to improve your own creditworthiness.
However, there are important factors to consider before becoming an authorized user yourself or adding an authorized user to your account. Read on to learn more.
Table of contents:
What is an authorized user?
An authorized user is a person added to someone else’s credit card account who has permission to make charges. The main user who owns the account is the primary cardholder, while an authorized user is sometimes referred to as an additional cardholder.
Who can be an authorized user?
Anyone can be an authorized user, provided they meet the card issuer’s requirements and the primary cardholder adds them to the account. Typically, the primary cardholder and authorized user have an established, trusted relationship.
Here are the most common scenarios where adding an individual to your account is beneficial.
Parent/child: Parents may add their children as authorized users to their account to help them build credit history and give them access to the line of credit for emergencies or family expenses.
Employer/employee: Business owners may add trusted employees as authorized users for business-related expenses.
Couples: Couples may designate one spouse as the primary cardholder and the other spouse as the authorized user, especially when one partner has a higher credit score than the other.
Is an authorized user responsible for credit card debt?
No, being an authorized user doesn’t make you responsible for paying credit card debt. While an authorized user can make purchases, payment responsibilities fall to the primary cardholder. Authorized users have no legal responsibility to make payments.
How does being an authorized user affect your credit?
Accounts you’re an authorized user of are typically included in your credit report, which can help you build credit history. Also known as piggybacking credit, this allows you to use the primary cardholder’s positive credit habits to build your credit.
While being an authorized user can help increase your credit score, it can also have the opposite effect. If the primary cardholder falls behind on payments or maintains a high credit utilization ratio, this can negatively impact your credit.
It’s important to note that not all credit card issuers report authorized user activity to the three major credit bureaus. Consider checking with the primary cardholder’s issuer before becoming an authorized user to make sure they report to the credit bureaus.
How to add an authorized user
To add an authorized user, reach out to your credit card company online, by phone or in-person. Your credit card company will likely require the authorized user’s name, address, birth date and Social Security number to add them to the account.
Once you add someone as an authorized user, your credit card company will mail you a second card that the authorized user can use, although you can decide whether or not you give it to them. Keep in mind that you don’t need to give the authorized user a physical card for them to receive the credit-building benefits.
Here are additional tips to remember when adding an authorized user:
Only add authorized users you trust since they will have access to your credit line.
If your credit card company offers this option, consider setting up spending limits for authorized users to prevent overspending.
Set up alerts to notify you when an authorized user makes a purchase.
How to remove an authorized user
You can easily remove an authorized user if your circumstances have changed. Similarly to adding an authorized user, just contact your credit card company and request the authorized user be removed from the account. Consider also contacting the authorized user to notify them that you’re removing them from the account.
Here are some circumstances in which you may want to remove an authorized user from your account:
There’s been a change in relationship: For example, if your partner is an authorized user on your account and you break up
The account has been misused: If an authorized user is overspending on your account and negatively affecting your finances. For example, if your teen’s spending habits are out of control
There are also scenarios in which you may want to remove yourself as an authorized user from someone else’s account, such as:
You achieved financial independence: If you’ve established a credit history and no longer need access to the account, consider removing yourself to manage your finances independently.
The primary cardholder’s poor credit habits are affecting your credit score: If the primary cardholder is falling behind on payments, your credit could also take a hit, so it’s best to cut ties.
Joint credit card vs. authorized user
A joint credit card allows two people to share one account equally. The main difference between an authorized user and a joint credit card is who is legally obligated to make payments. While both parties are responsible for paying debt on a joint card, an authorized user isn’t required to make payments.
Keep in mind that fewer credit card issuers are offering joint accounts since companies prefer that only one individual is liable for the account. Meanwhile, most credit card issuers offer the option to add authorized users.
Authorized user FAQ
Still unsure whether becoming an authorized user is right for you? We’ve answered some common questions below.
How old do you have to be to be an authorized user on a credit card?
Some credit card issuers have age requirements ranging from 13 to 16, while others have no minimum age requirement.
How long does it take for authorized user accounts to show on your credit report?
Authorized user accounts will typically appear on your credit report within 30 to 45 days after you’re added to the account, as long as your credit card issuer reports to the credit bureaus.
What is the difference between having a cosigner and becoming an authorized user?
A cosigner shares responsibility for repaying the debt, while an authorized user isn’t legally obligated to make payments.
Monitoring your credit as an authorized user
Becoming an authorized user is a great way to kick-start your credit journey. As you start to build credit, it’s important to monitor your credit and ensure that no inaccurate negative items are impacting your score.
When you sign up for a free credit assessment with Lexington Law Firm, you’ll receive your credit score, credit report summary and a credit repair recommendation. View your credit snapshot today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Brittany Sifontes
Attorney
Prior to joining Lexington, Brittany practiced a mix of criminal law and family law.
Brittany began her legal career at the Maricopa County Public Defender’s Office, and then moved into private practice. Brittany represented clients with charges ranging from drug sales, to sexual related offenses, to homicides. Brittany appeared in several hundred criminal court hearings, including felony and misdemeanor trials, evidentiary hearings, and pretrial hearings. In addition to criminal cases, Brittany also represented persons and families in a variety of family court matters including dissolution of marriage, legal separation, child support, paternity, parenting time, legal decision-making (formerly “custody”), spousal maintenance, modifications and enforcement of existing orders, relocation, and orders of protection. As a result, Brittany has extensive courtroom experience. Brittany attended the University of Colorado at Boulder for her undergraduate degree and attended Arizona Summit Law School for her law degree. At Arizona Summit Law school, Brittany graduated Summa Cum Laude and ranked 11th in her graduating class.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
To build credit as an immigrant, you need an SSN or ITIN to open a bank account and apply for credit cards. You may also be able to transfer your credit score from your home country with a global credit scoring bureau.
Immigrants have always been a key part of what makes the United States a great country. A recent study shows that roughly 13.7 percent of the U.S. population consists of immigrants. Unfortunately, as an immigrant, it can be difficult to build a credit score and get access to funds, as well as other services that might require individuals to have a credit score.
Although it’s difficult to build credit as an immigrant, it’s possible. Here, we go over how to start building credit, the importance of having a credit score, and ways to improve it. With this information, you may be able to access credit cards, get loans, and potentially purchase a home. Keep reading to learn more about building credit as a new immigrant.
Why should immigrants build their credit score?
Having a credit score and good credit history can help you rent an apartment and purchase a vehicle or a home. Some employers might check your credit, and your credit may also affect how much of a deposit you need to put down to rent or access services like utilities.
Once you establish credit, it’s important to continue improving your credit score. A better credit score means lower interest rates, lower deposit amounts, and access to more funds. A good credit score starts at 670 using the FICO® scoring model, but it can go as high as 850 and as low as 300.
To get started, you can either transfer your credit score from a global bureau or go through the process of getting a Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
Does your credit history transfer from your country of origin?
The United States isn’t the only place that uses credit scores, so you may have a credit score from another country. Credit scoring models can vary between countries, so if you have a credit score from your home country, you’ll need to work with a global credit scoring bureau to transfer it.
Where to start building credit in the U.S.
To start building credit as an immigrant in the United States, there are steps that you need to take. You can then build credit to buy a home or a vehicle or use it to access additional funds to start a business or make purchases.
Apply for a Social Security number (SSN): An SSN is often needed to open bank accounts and apply for loans. If you can’t get an SSN, you may be able to use an Individual Taxpayer Identification Number (ITIN).
Open a U.S. bank account: Bank accounts don’t affect your credit, but some credit card issuers require a bank account. You may also be able to use the bank from your home country if they have locations in the U.S.
Apply for a credit card: A credit card is the first big step toward building credit. Without credit history, the amount may be low. If you have a low score or no credit history, you can get a secured credit card.
5 ways to build credit as a new immigrant
Once you establish a credit score, there are some credit hacks that you can use to strengthen it. Below are five ways to start building credit or improve poor credit.
1. Get a secured credit card
There aren’t specific credit cards for immigrants, but as we mentioned, if you have no credit or bad credit, a secured credit card can be one of the best ways to start building it.
Unlike a standard credit card, where you borrow money from the issuer, a secured credit card uses your own funds. With a secured credit card, you make an initial deposit, which becomes your credit limit. As you use it, your issuers will report the payments (or lack thereof) to the credit bureaus, impacting your score.
2. Become an authorized user
One of the reasons it’s difficult to get a credit card as an immigrant with no credit history is that banks may see you as high risk. If you have a friend or family member with a credit card, they can add you as an authorized user to their account. Becoming an authorized user gives you a credit card that’s linked to the primary cardholder’s account. As long as this person is making the payments on time, you benefit from their credit history.
You don’t have to use the card to benefit from the primary cardholder spending and making payments. However, you can harm their score if you’re late or miss payments for transactions you made with the card.
3. Report your rent and bills
Typically, rent and bills don’t impact your credit score, but some services allow you to report your rent and other bills for a slight boost. These services include Credit.com’s ExtraCredit service or Experian® Boostcredit builder loans can help. These loans are specifically for those trying to build credit—as you repay your loan, the creditor reports the payments to the credit bureaus. Unlike a traditional loan, you get access to the funds after you pay it off.
How long does it take to build credit in the U.S.?
The amount of time it takes to build your credit will differ for everyone. For example, if you can transfer your good credit score from your home country, it may not take much time. If you’re starting with bad or no credit, it may take months to build your credit. Once your payments start getting reported, you should begin seeing changes to your credit score.
Start building credit as a new immigrant today
If you’re a new immigrant trying to build your credit in the United States, the best place to start is educating yourself. Your credit score, as well as the details of your credit report, can give you an idea of where you stand and where you need to improve. Here at Lexington Law Firm, we have various tools to help you better understand your credit score. Get your free credit assessment today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Paola Bergauer
Associate Attorney
Paola Bergauer was born in San Jose, California then moved with her family to Hawaii and later Arizona.
In 2012 she earned a Bachelor’s degree in both Psychology and Political Science. In 2014 she graduated from Arizona Summit Law School earning her Juris Doctor. During law school, she had the opportunity to participate in externships where she was able to assist in the representation of clients who were pleading asylum in front of Immigration Court. Paola was also a senior staff editor in her law school’s Law Review. Prior to joining Lexington Law, Paola has worked in Immigration, Criminal Defense, and Personal Injury. Paola is licensed to practice in Arizona and is an Associate Attorney in the Phoenix office.
The Capital One Venture X Rewards Credit Card is a premium credit card that offers cardholders a host of benefits, such as a $300 annual travel credit, 10,000 anniversary bonus miles, 10x miles on hotels and rental cars booked through Capital One Travel and Priority Pass membership.
Below we dive into the specifics of the Priority Pass membership benefit so you can take full advantage of it when traveling with your Capital One Venture X Rewards Credit Card.
Overview of the Capital One Venture X Rewards Credit Card Priority Pass benefit
For frequent flyers, the Capital One Venture X Rewards Credit Card Priority Pass membership is one of the card’s most useful benefits as it gives cardholders access to the global Priority Pass airport lounge network.
Authorized users of the card are also eligible to sign up for a Priority Pass membership, meaning that if you have a Capital One Venture X Rewards Credit Card and add someone as an authorized user (for instance, a spouse or relative), that individual can also access Priority Pass lounges when traveling.
How to enroll in Priority Pass as a Capital One Venture X Rewards Credit Card holder
To take advantage of the Priority Pass benefit, you’ll need to enroll by following these steps:
Receive your Capital One Venture X Rewards Credit Card in the mail, which can take up to two weeks after you’ve been approved for the card.
Enter your Capital One card number, country of residence and address to create your Priority Pass account.
Enter your billing details, which will be used to identify you when you arrive at a Priority Pass lounge.
Review and accept the membership declaration, then click “Join.”
Once you’re enrolled, you can access your account through the Priority Pass website or the mobile app.
🤓Nerdy Tip
We recommend downloading the Priority Pass mobile app, which makes it easy to find Priority Pass lounges while you’re traveling. You can also take advantage of the digital card on the app to enter eligible lounges.
How to enter Priority Pass lounges with your membership
To enter a Priority Pass lounge using your membership, you’ll first need to locate a lounge to visit.
Priority Pass has plenty of lounges — over 1,500 internationally. As of this time, the lounges are available in 44 U.S. cities.
U.S. Priority Pass Locations
Baltimore.
Buffalo, N.Y.
Charleston, S.C.
Charlotte Douglas, N.C.
Cleveland.
Colorado Springs, Colo.
Fort Lauderdale, Fla.
Greenville-Spartanburg, S.C.
Hebron, Ky.
Indianapolis.
Jacksonville, Fla.
Kahului, Hawaii.
Las Vegas.
Lexington, Ky.
Little Rock, Ark.
Los Angeles.
Minneapolis/St. Paul.
New Orleans.
Newark, N.J.
Oakland, Calif.
Orlando, Fla.
Philadelphia.
Pittsburgh.
Portland, Ore.
Providence, R.I.
Salt Lake City.
San Diego.
San Francisco.
San Jose, Calif.
St. Louis.
Syracuse, N.Y.
Tampa, Fla.
Tucson, Ariz.
Washington, D.C.
Some airports may have several Priority Pass lounges, and some have none at all.
Once you find a Priority Pass lounge to visit, you’ll need the following to get in:
A same-day boarding pass.
An ID, such as a driver’s license or passport.
One of the following:
YourCapital One Venture X Rewards Credit Card.
Your physical Priority Pass membership card.
Your digital Priority Pass membership card.
Keep in mind that Priority Pass lounges have capacity limits and can fill up, so we recommend having a back-up lounge or plan in mind if the Priority Pass lounge you want to visit is full.
Are there limits on guests or visits to Priority Pass lounges with the Capital One Venture X Rewards Credit Card?
One of our favorite features of the Capital One Venture X Rewards Credit Card Priority Pass benefit is that there is no limit to the number of lounges you can visit in a year.
Additionally, all guests traveling with you also receive complimentary access to the lounge.
Is it worth getting a Capital One Venture X Rewards Credit Card for the Priority Pass benefit?
The annual fee on the Capital One Venture X Rewards Credit Card is $395, while a Priority Pass membership that offers unlimited visits costs $469 per year, making the Capital One Venture X Rewards Credit Card Priority Pass membership a great value.
But if you’re able to take advantage of the other benefits offered by the Capital One Venture X Rewards Credit Card, like the card’s $300 annual travel credit, 10x miles on hotels and rental cars booked through Capital One Travel and the 10,000 miles anniversary bonus, then it makes sense to sign up for Priority Pass and the card’s other benefits.
Capital One Venture X Rewards Credit Card Priority Pass, recapped
Cardholders need to enroll in Priority Pass to gain access, but the process is straightforward. Once enrolled, you’ll be able to access a global network of Priority Pass lounges with no limit on the number of visits you can make or guests that you can bring each year.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2024, including those best for:
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
A credit privacy number (CPN) is formatted similarly to a Social Security number and is commonly used by fraudulent companies to scam people with bad credit. Using a CPN to apply for credit constitutes fraud, and they’re often tied to criminal activity.
A credit privacy number (CPN) is sold to consumers as a product to repair bad credit. In reality, these numbers can be associated with identity theft. The Federal Trade Commission (FTC) considers identity theft to be any instance where a criminal uses someone else’s personal information to “open accounts, file taxes or make purchases.” CPNs can pave the way for such fraudulent activity.
Here, we’ll explain what credit privacy numbers are, what they’re used for and how to avoid scams. Most importantly, you’ll also learn how to fix your credit without a CPN.
A credit privacy number, or CPN, is sold to consumers as a way to repair bad credit. But did you know these numbers can be associated with identity theft? Experian® reports that approximately one in every 20 Americans becomes a victim of identity theft each year, so it’s important to learn the dangers of CPNs if a company advertises one to you.
When you have bad credit, you may be more susceptible to methods that hurt your situation more than help it. Here, you’ll learn about what credit privacy numbers are, what they’re used for and how to avoid scams. Most importantly, you’ll also learn about how to repair your credit without a CPN.
Key takeaways:
Credit privacy numbers (CPNs) are often stolen Social Security numbers (SSNs).
Creating and even using a CPN can count as fraud.
No entities have the legal authority to issue CPNs despite their claims.
Table of contents:
What is a CPN?
A credit privacy number (CPN) is a nine-digit number set up in the same format as a Social Security number: XXX-XX-XXXX. CPNs aren’t issued by the federal government and have no official legal standing. They operate in a legal gray area, but using a CPN to apply for credit constitutes fraud, and they’re often tied to criminal activity.
You may also come across some other terms for CPNs, like:
Credit profile number
Secondary credit number
Credit protection number
What is a CPN used for?
Companies market and sell CPNs to supposedly fix bad credit, but using these products can have steep legal ramifications. CPNs are stolen Social Security numbers or products of synthetic identity fraud. It’s illegal to use a CPN to apply for credit, so even if you are “issued” one by a company, you can’t use it in any way that helps your credit.
A common scenario is criminals stealing Social Security numbers that belong to minors or those who are already deceased, since credit monitoring services usually don’t track their use. These stolen SSNs are then sold as CPNs, so all parties involved are participants in identity theft.
Synthetic identity fraud is another way criminals create CPNs to sell. This method involves using a computer algorithm to randomly create nine-digit numbers that match the formatting of Social Security numbers. Criminals then use an illegal online validator to ensure the fake number will pass as a legitimate SSN before selling it. One way they do this is by using potential SSNs that haven’t been issued to anyone yet.
How are CPNs different from SSNs, EINs and ITINs?
There are several types of numbers that can be used as identifiers for legal and financial purposes. Here’s a breakdown of the most common:
Social Security number (SSN): Issued by the federal government and is a unique identifier. Most U.S. citizens are issued one at birth, which they use to apply for a driver’s license, hold jobs, file taxes and apply for credit, among other things.
Employer identification number (EIN): A unique identifier for businesses and issued by the IRS. This allows business owners to open business bank accounts, get business licenses and file taxes under the business’s name.
Individual taxpayer identification number (ITIN): Similar to Social Security numbers, but the main difference is that ITINs are used by those classified as “authorized noncitizens.” For example, an immigrant working in the United States would need an ITIN to file and pay taxes.
The big difference between these numbers and a credit privacy number is that they’re legitimate numbers issued by actual entities within the federal government, and a CPN is not.
Is a CPN legal?
No, using a CPN is not legal. CPNs started as a byproduct of the Privacy Act of 1974. This act made it so that you couldn’t be forced to provide your Social Security number to a third party unless it was required by federal law, such as applying for a passport. This was meant to give Americans more privacy and protect them from identity theft.
Credit repair scams often market CPNs to those trying to rebuild their credit. But in fact, any business that sells a CPN is engaging in fraudulent activity.
What happens to those breaking the law with a CPN?
By purchasing a credit privacy number, you may unknowingly be breaking the law. According to the Federal Reserve Bank of St. Louis, CPN schemes often involve stolen CPNs from children, the elderly and incarcerated individuals. If an individual purchases a CPN, they may be convicted of various identity theft crimes, as well as the crime of making false statements on a loan or credit application.
The Department of Justice has been cracking down on identity theft, and they carry sentences of 15 to 30 years along with various fines for those who break these laws.
How to avoid a CPN scam
The best way to avoid a credit privacy number scam is to avoid anything involving a CPN. Be wary of a business that offers you a new credit identity—such as a CPN—it’s likely an identity fraud scam.
Other red flags include a company asking or suggesting that you lie about any identifying information, including your name, address or phone number, and a business asking for payment before completing any services.
Check out the Credit Repair Organizations Act to learn more about your credit repair rights.
How to report a CPN scam
The best way to eliminate criminals using fraudulent CPN scams is to report them whenever you see them, and you can do this through the Department of Justice. On their Fraud Section page, they have a variety of links and resources to report different scams.
Scams involving credit privacy numbers can also be reported to your local police department, your state’s attorney general and the Federal Trade Commission. While the investigation will be taking place at the state and federal level, reporting to your local police department can let them know what scams may be operating in the area so they can issue warnings to the community.
How to repair your credit without a CPN
Purchasing a CPN is tempting because it seems like a fast and easy way to repair your credit. In reality, building a good credit score takes time, but there are steps you can start taking today.
Dispute errors on your credit report: Derogatory marks include collections, late or missed payments, bankruptcies and other negative marks. These heavily weigh down your credit, so clean your credit report often.
Use a pay-for-delete letter: You may have heard that paying off collections usually won’t improve your credit. If you negotiate a pay-for-delete agreement with the collection agency, they may remove the collection account from your report, which would likely help your credit.
Become an authorized user: If you have bad credit, try to become an authorized user on a friend or family member’s credit card account to “piggyback” off their credit.
Find a cosigner: Making payments on loans—like auto or personal loans—can improve your credit. If you can’t get approved for a loan, finding a cosigner may help.
Don’t miss a payment: One of the best things you can do is ensure you don’t miss any payments that get reported to credit bureaus. Maintaining a good credit history will help you repair and improve your credit.
Repair your credit with Lexington Law Firm
Although there are credit repair scams, legitimate credit repair companies can help you rebuild your credit. Lexington Law Firm has a team of legal professionals who have experience with credit recovery.
They can review your credit report, find errors that may be hurting your credit and challenge them on your behalf. Our services also include tools such as a credit snapshot, which can help you maintain good credit and improve your financial future.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Vince R. Mayr
Supervising Attorney of Bankruptcies
Vince has considerable expertise in the field of bankruptcy law.
He has represented clients in more than 3,000 bankruptcy matters under chapters 7, 11, 12, and 13 of the U.S. Bankruptcy Code. Vince earned his Bachelor of Science Degree in Government from the University of Maryland. His Masters of Public Administration degree was earned from Golden Gate University School of Public Administration. His Juris Doctor was earned at Golden Gate University School of Law, San Francisco, California. Vince is licensed to practice law in Arizona, Nevada, and Colorado. He is located in the Phoenix office.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Some credit facts you need to know are your credit score is based on five key factors, FICO credit scores range from 300 to 850, checking your own credit won’t hurt your score, and twelve more facts outlined below.
With all of the misleading and incorrect information about credit floating around, it’s no wonder some of us feel lost when it comes to our credit reports and credit scores. Fortunately, we’re here to help set everything straight with these simple and clear explanations.
We’ve taken the time to compile the most important credit facts you need to know to understand your credit and everything that impacts it. Just as importantly, we’re setting the record straight when it comes to credit myths that have been lingering for too long. Read on to learn everything you’ve always wanted to know about credit.
1. Your credit score is based on five key factors
Most lenders make their decisions using FICO credit scores, which are based on five key factors. That means that when you apply for a new credit card or loan, these are the primary influences on whether you’ll end up getting approved. Here are the five factors, in order of importance: payment history, credit utilization, length of credit history, credit mix and new credit inquiries.
35% – Payment history. Your ability to consistently make payments has the biggest impact on your score. Having late and missed payments is detrimental to your credit score, while a streak of on-time payments has a positive effect.
30% – Credit utilization. Your utilization measures how much of your available credit you’re using across all of your cards. By using one-third or less of your total credit limit, you could help improve your credit.
15% – Length of credit history. In general, having a longer credit history is helpful, though it depends on how responsibly you’ve used credit over time. Using credit well over time signals to lenders that you can be trusted to manage your finances.
10% – New credit. Applying for new credit leads to hard inquiries, which can negatively impact your credit score. Spacing out your new credit applications—and only applying for credit when you need it—helps your score.
10% – Credit mix. Having a variety of different types of credit—like credit cards, an auto loan or a mortgage—can influence your score as well. A diverse credit portfolio demonstrates your ability to successfully manage different types of credit.
With the knowledge of exactly how your score gets calculated, you can make smarter decisions with credit.
Bottom line: Credit scores aren’t as mysterious as they first appear, and you have control over all of the factors that determine your score.
2. Credit reports are different than credit scores
Although they are related, a credit report and a credit score are different. Also, it’s a bit misleading to talk about a single credit report or a single credit score, because the reality is that you have several different credit reports, and your credit score can be calculated in many different ways.
A credit report is a collection of information about your credit behaviors, like the accounts you have and when you make payments. Three main bureaus—Experian, Equifax and TransUnion—each publish a separate credit report about you.
A credit score uses the information in your credit report to create a numerical representation of your creditworthiness. In other words, all of the information in your report is simplified into a single number that gives lenders an idea of how likely you are to repay a debt.
Surprisingly, your credit report does not include a credit score. Instead, lenders who access your report use formulas to determine a score when you apply for credit. The most common scoring models are FICO and VantageScore, but lenders can make modifications to the calculations to give more weight to areas that are more important to them.
Bottom line: You’ll want to be familiar with both your credit reports and your credit scores, as they each play a role in helping you obtain new credit.
3. Negative credit items will eventually come off your credit report
Negative items on your credit report can cause damage to your credit score. Negative items include late payments, collection accounts, foreclosures and repossessions.
Although these items can lead to significant drops in your credit score, their effect is not permanent. Over time, negative items have a smaller and smaller impact on your score, as long as your credit behaviors improve so that more recent items are more favorable.
Additionally, most negative items should remain on your report for seven years at the most due to the regulations set by the Fair Credit Reporting Act. A bankruptcy, on the other hand, can last up to 10 years in some cases.
Bottom line: Negative items can cause a decrease in your credit score, but they aren’t permanent. Start building new credit behaviors and your score can recover over time.
4. FICO credit scores range from 300 to 850
One of the most common credit scoring models is produced by the Fair Isaac Corporation, also known as FICO. While you may hear “FICO score” and “credit score” used interchangeably, there are in fact several different scoring models, so you could have a different credit score depending on which lender or financial institution you’re working with. The score you’re assigned by FICO will usually always be in a range from 300 to 850.
Accessing your FICO score gives you the chance to have a high-level overview of your credit health. Scores that are considered good, very good or exceptional often make it much easier to get new credit cards or loans when you need them. On the other hand, scores that are fair or poor can make getting new credit more difficult.
Here’s an overview of the FICO scoring ranges:
800 – 850: Exceptional
740 – 799: Very Good
670 – 739: Good
580 – 669: Fair
300 – 579: Poor
Remember, though: credit scores are not fixed and permanent. Your score responds to factors like payments, utilization and credit history, so positive decisions now will benefit your score in the long term.
Bottom line: The FICO scoring ranges lay out broad categories to give you a sense of how you’re doing with credit—and can also help you set a goal for where you want to be.
5. The majority of lenders use FICO scores when making decisions
While there are multiple credit scoring models, the majority of lenders check FICO scores when making decisions. That means that when you apply for new credit—whether it’s a credit card, a loan or a mortgage—the score that’s more likely to matter is your FICO score.
That’s important to know, because many free credit monitoring services will show you score estimates or your VantageScore. Some credit card companies provide a FICO score, however, and you can also request to see the credit score that lenders used to make their decision during the application process.
Fortunately, credit scoring models tend to reference the same data and weight factors fairly similarly. That means if you make on-time payments, keep your utilization low, avoid opening up too many new accounts and have a consistent credit history with a variety of accounts, you’ll probably be in good shape regardless.
Bottom line: Knowing your FICO score can help you have an idea of how lenders will view your application for new credit.
6. You have many different types of credit scores
Credit scores vary based on the credit bureau reporting them and the credit scoring model used. The major credit bureaus all have slightly different information regarding your credit history. This means that these three, along with other credit reporting agencies, report several FICO credit scores to lenders to account for different information they’ve collected.
There are also different scores specific to particular industries. For example, auto lenders review different risk factors than mortgage lenders, so the scores each lender receives might differ. Although it can get confusing, the most important things to remember are the five core factors that affect your credit score.
Bottom line: Although many people reference their credit score in the singular, the truth is that there are many different types of credit scores that take into account different factors.
7. Checking your own credit won’t hurt your score
Many people believe that checking their credit score or credit report hurts their credit, but fortunately, this isn’t true. Getting a copy of your credit report or checking your score doesn’t affect your credit score. These actions are called “soft” inquiries into your credit, and while they are noted on your credit report, they shouldn’t have any effect on your score.
Hard inquiries, on the other hand, are noted when lenders look at your credit during an application process—and these can temporarily reduce your score. This is used to discourage you from applying for new credit too frequently. However, the effect is typically small, and after a couple of years the notation of a hard inquiry will leave your report.
Bottom line: You can check your own credit report and credit score without any negative effect—and we actually encourage you to do so to stay on top of your credit health.
8. You can check your credit score and credit reports for free
There are three main ways to check your credit for free. You’ll likely want to take a look at both your credit reports and your credit scores. Here’s how to get a hold of both of those:
You’re entitled to a free credit report once each year by visiting AnnualCreditReport.com, a government-sponsored website that gives you access to your reports from TransUnion, Experian and Equifax.
You may be able to check your credit score free by contacting your bank or credit card company. Additionally, many free services—like Mint—enable you to monitor your score for free. Just make sure to note which kind of credit score you’re seeing, because there are many different scoring methods.
The information you find in your credit report lays out the factors that determine your credit score. By scanning your report closely, you’ll likely find out the best strategy for improving your score—for instance, by improving your payment history or lowering your utilization.
Bottom line: Information about your credit is freely available, so take advantage of those resources to stay on top of your credit report and score.
9. Your credit score can cost you money
Ultimately, the purpose of credit scores is to help lenders determine whether they should offer you new credit, like a loan or a credit card. A lower score indicates that you may be at greater risk for default—which means the lender has to worry that you won’t pay back your debts.
To offset this risk, lenders often deny credit applications for those with lower scores, or they extend credit with high interest rates. These interest rates can cost you a lot of money over time, so working to improve your credit score can have a measurable effect on your financial life.
Consider, for example, a $25,000 auto loan. With a fair credit score, you may secure an interest rate of 5.3 percent—so you’ll pay a total of $3,513 in interest over five years. With an excellent credit score, your rate could drop to 3.1 percent, and you’ll save nearly $1,500 in interest charges over that same five-year period.
Bottom line: A good credit score can have a positive impact on your finances, and a bad score can cost you money in interest charges.
10. Canceling old credit cards can lower your score
If you have a credit card that you’re no longer using, you may be tempted to close the account entirely. Before doing that, though, consider how it could impact your credit score.
Recall that two credit factors are utilization and length of credit history. Closing an old account could affect one or both of those factors when it comes to calculating your score.
Your credit utilization could drop after closing an account because your credit limit will likely be lower. Since utilization represents all of your balances divided by your total credit limit, your utilization will go up if your credit limit goes down (and if your balances stay the same).
Your length of credit history could be lowered if you close an older account that is raising the average age of your credit.
Some people worry that having a zero balance on their credit card can negatively impact their score. This is just a credit myth. A zero balance means you aren’t using the card to make any purchases. Keeping the credit card open while not using it actually works to your benefit. You’re able to contribute to the length of your credit history, while not risking the chance of debt and late payments.
You may need to use the card every now and then to avoid having it closed. Additionally, if the card has an annual fee, you may need to close the card or ask to have the card downgraded to a version that does not have a fee. Still, if there’s a way to keep the card open, it’s often good to do so even if you don’t plan to regularly use it.
Bottom line: An old credit card can benefit your credit score even if you aren’t using it anymore.
11. You can still get a loan with bad credit
It’s true that getting a loan can be more difficult with bad credit, but it’s not impossible. There are bad credit loans specifically for people with lower credit scores. Note, however, that these loans often come with higher interest rates—or they require some sort of collateral that the lender can use to secure the loan. That means if you don’t pay your loan back, the lender will be able to seize the property you put up as collateral.
If you don’t need a loan immediately, you could consider trying to rebuild your credit before applying. There are credit builder loans, which are specifically designed to help you build up a strong payment history and improve your credit in the process. Unlike a traditional loan, you pay for a credit builder loan each month and then receive the sum after your final payment. Since these loans represent no risk to lenders, they’re often willing to extend them to people with poor credit history looking to raise their score.
Bottom line: You can get a loan even with bad credit—but sometimes it’s wise to find ways to raise your score before applying.
12. Credit scores aren’t the only deciding factor for lending decisions
While credit scores are important in lending decisions, lenders may take other factors into account when deciding whether to offer you new credit. For example, your income and employment can play a significant role in your approval odds. Additionally, some loans (like auto loans and mortgages) are secured by collateral that the lender can seize if you default. These loans may be considered less risky for the lender in certain cases because the asset can help offset any losses from nonpayment.
In many cases, your debt-to-income ratio is also an important factor in whether you’re approved for a loan or credit card. Lenders consider your current monthly debt payments (from all sources) as well as your monthly income to determine whether you may be overextended financially.
Two different people may pay $1,500 each month for student loans, a car payment and a mortgage. That said, if one individual makes $3,500 each month and the other makes $8,000 each month, their situations will be considered very differently by a potential lender.
Bottom line: Keeping your credit score high can help you secure credit when you need it, but you’ll want to stay on top of all aspects of your financial health.
13. Your credit report can help you spot fraud
Regularly checking your credit report can help you notice fraud or identity theft. If someone is using your information to open accounts, they will show up on your credit report.
If you notice an account that you did not open, you’ll want to start taking steps to protect your identity from any further damage. You may also want to freeze or lock your credit, which prevents anyone from using your information to open up more accounts.
Bottom line: Reviewing your credit report provides you an opportunity to notice when something is amiss.
14. Joint accounts affect your credit scores, but you do not have joint scores
If you have a joint account with someone else, that account will be reflected on both of your credit reports. For example, a loan that was opened by you and your spouse will show up for both of you—and will affect both of your credit scores. That said, your credit history, credit report and credit score remain separate. No one—including married couples—has a joint credit report or joint credit score.
In addition to joint accounts, you may also have authorized users on your credit card, or be an authorized user yourself. Authorized users have access to account funds, but they are not liable for debts. That means that if you make someone an authorized user on your credit card, they can rack up charges, but you’ll be on the hook if they don’t pay.
Because joint account owners and authorized users can influence credit scores in significant ways, we advise you to be careful about who you open accounts with or provide authorization to.
Bottom line: Even though joint account owners and authorized users can influence someone else’s credit, there are no shared credit reports or joint credit scores.
15. Many credit reports contain inaccurate credit information
The Federal Trade Commission found that one in five people has an error on at least one of their credit reports, and these inaccuracies can greatly impact your credit. (Also see this 2015 follow-up study from the FTC for more information regarding credit report errors.) This is why you should frequently check your credit report and dispute any inaccurate information. For example, since payment history accounts for 30 percent of your credit score, one wrong late payment can significantly hurt your score.
It’s important to get your credit facts straight so you understand exactly how different things impact your score. One of the first things you should learn is how to read your credit report so you can quickly spot discrepancies and ensure that the information reported is fair and accurate.
After scrutinizing your credit report, you can look into other ways to fix your credit, like paying late or past-due accounts, so you can help your credit with your newfound knowledge. You can also take advantage of Lexington Law Firm’s credit repair services to get extra help and additional legal knowledge to assist you.
Bottom line: Your credit report could have inaccurate information that’s hurting your score unfairly. Fortunately, there is a credit dispute process that can help you clean up your report and ensure all of the information on it is correct.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Nature Lewis
Associate Attorney
Before joining Lexington Law as an Associate Attorney, Nature Lewis managed a successful practice representing tenants in Maricopa County.
Through her representation of tenants, Nature gained experience in Federal law, Family law, Probate, Consumer protection and Civil law. She received numerous accolades for her dedication to Tenant Protection in Arizona, including, John P. Frank Advocate for Justice Award in 2016, Top 50 Pro Bono Attorney of 2015, New Tenant Attorney of the Year in 2015 and Maricopa County Attorney of the Month in March 2015. Nature continued her dedication to pro bono work while volunteering at Community Legal Services’ Volunteer Lawyer’s Program and assisting victims of Domestic Violence at the local shelter. Nature is passionate about providing free knowledge to the underserved community and continues to hold free seminars about tenant rights and plans to incorporate consumer rights in her free seminars. Nature is a wife and mother of 5 children. She and her husband have been married for 24 years and enjoy traveling internationally, watching movies and promoting their indie published comic books!
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Becoming an authorized user on an open credit account, paying down student loans and securing credit builder loans can help young adults build credit.
Learning how to build credit at 18 can pay dividends throughout your life and help you explain financial concepts to others. Length of credit history is one of many factors that impact your overall credit score, so building credit early on can make it easier to secure credit cards and loans in the future.
Here, you can learn how to build credit at 18 and better understand which factors influence your credit health. You can also discover how Lexington Law Firm can help you improve your financial literacy.
Key takeaways:
You don’t have a credit score until you take actions that are reported to credit bureaus.
Length of credit history makes up 15 percent of your FICO® credit score.
Paying down student loans will positively affect your credit over time.
Table of contents:
1. Learn what credit score you start with
Starting credit scores vary from person to person and are largely based on each individual’s financial habits. When you first secure a loan, a credit card or a line of credit, your credit habits during the following six months will determine your starting score. Afterward, your credit score can increase or decrease based on several factors.
Who provides credit scores?
Credit reporting bureaus keep track of your credit history and provide reports based on your financial habits. Equifax®, Experian® and TransUnion® are the three main credit bureaus you can request a credit report from. Your credit score will be based on the information found in your credit report.
The law requires each bureau to provide at least one free report each year. Checking one of your credit reports every few months throughout the year can help you track your credit habits and progress.
2. Become an authorized user on a credit card
Just like other adults, young adults can become authorized users on another person’s credit card with the cardholder’s permission. With this method, an individual without any credit history can make purchases with a credit card and gradually build credit.
The caveat to this method is that all activity with a credit card will affect everyone connected to it. If a young adult gains access to one of their parents’ credit cards, the child’s activity will increase or decrease their parent’s credit score as well as their own.
3. Apply for a student loan
As previously mentioned, length of credit history can positively impact your credit score. For many young adults, a student loan will be their first credit account until they can acquire a credit card.
Paying off your loan might temporarily cause your score to dip, as your oldest account will be closed. However, regularly making timely payments will benefit your overall credit score far more than this dip will hurt it.
4. Secure a credit builder loan
Credit builder loans are helpful options for individuals with no credit history and people looking to repair their credit. These loans often have flexible requirements for applicants, though they typically have higher-than-average interest rates and brief repayment terms.
Community banks, credit unions and online lenders offer various credit builder loans. Large commercial banks don’t usually offer these loans, as their small payout amounts (normally $300 – $1,000) aren’t helpful to their everyday operations.
5. Frequently review your credit report
Challenging an error on your credit report and getting it removed can be an effective way to improve your credit. To discover these issues, it helps to routinely check your credit reports throughout the year.
Equifax, Experian and TransUnion all accept challenges by phone or online, and Lexington Law Firm can also help you challenge any errors on your report. Explore our services and see what features our tiered plans provide.
6. Space out your credit card applications
Every time you apply for credit, a hard inquiry occurs. This means that a third party (i.e., the bank offering the credit card you applied for) asked to review your credit report. Hard inquiries can appear on your report for years, but they’ll generally only hurt your credit for 12 months.
Issues can arise if you apply for too many credit cards or other lines of credit in a short period. Those dings against your credit can mount and damage your credit. On the other hand, spacing out your applications can help keep your credit healthy and stable.
7. Manage your credit utilization ratio
Your credit utilization measures your current account balances against your total credit limit. The higher your utilization is, the more negatively it will affect your credit. Ideally, it’s best to keep your utilization below 30 percent, or even 10 percent if possible.
Here’s an example to help visualize credit utilization. If you have a total credit limit of $5,000 and you’re currently using $500 of your available credit, your credit utilization will be 10 percent.
8. Use a credit monitoring service
Credit monitoring simply refers to reviewing credit reports and making decisions based on that information, whether you see inaccurate information that needs to be fixed, or accurate information that shows you where you can improve your credit usage. People can do this process themselves or seek out a credit monitoring service for help. Institutions like banks, credit unions and the three credit bureaus all provide distinct credit monitoring services.
Learn to manage credit with Lexington Law Firm
Young adults looking to build and manage their credit have many resources at their disposal. Still, professional advice from individuals with years of experience can make a big difference. Lexington Law Firm can provide a free credit assessment to help you get a sense of where your credit is starting and where you may want to go from here.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Brittany Sifontes
Attorney
Prior to joining Lexington, Brittany practiced a mix of criminal law and family law.
Brittany began her legal career at the Maricopa County Public Defender’s Office, and then moved into private practice. Brittany represented clients with charges ranging from drug sales, to sexual related offenses, to homicides. Brittany appeared in several hundred criminal court hearings, including felony and misdemeanor trials, evidentiary hearings, and pretrial hearings. In addition to criminal cases, Brittany also represented persons and families in a variety of family court matters including dissolution of marriage, legal separation, child support, paternity, parenting time, legal decision-making (formerly “custody”), spousal maintenance, modifications and enforcement of existing orders, relocation, and orders of protection. As a result, Brittany has extensive courtroom experience. Brittany attended the University of Colorado at Boulder for her undergraduate degree and attended Arizona Summit Law School for her law degree. At Arizona Summit Law school, Brittany graduated Summa Cum Laude and ranked 11th in her graduating class.
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Home » Credit » 6 Ways to Help Your Child Build Credit During College
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College students have a lot on their plate already, including the need to study to get good grades, participating in any number of on-campus activities and potentially working part-time to have some spending money.
That said, college students should also focus on their financial future, including steps they can take to build credit before they enter the workforce.
After all, having a credit history and a good credit score can mean being able to rent an apartment, finance a car or take out a loan, whereas having no credit at all can mean sitting on the sidelines until the situation changes.
Fortunately, there are all kinds of ways for young adults to build credit while they’re still in school. Some strategies require a little work on their part, but many are hands-off tasks that you only have to do once.
Teach Them Credit-Building Basics
Make sure your student knows the basic cornerstones of credit building, including the factors that are used to determine credit scores. While factors like new credit, length of credit history and credit mix will play a role in their credit later on, the two most important issues for credit newcomers to focus on include payment history and credit utilization.
Payment history makes up 35% of FICO scores and credit utilization ratio makes up 30% of scores.
Generally speaking, college students and everyone else can score well in these categories by making all bill payments on time and keeping debt levels low. How low?
Most experts recommend keeping credit utilization below 30% at a maximum and below 10% for the best possible results. This means trying to owe less than $300 for every $1,000 in available credit limits at a maximum, but preferably less than $100 for every $1,000 in credit limits.
Add Your Child as an Authorized User
One step you can personally take to help a child build credit is adding them to your credit card account as an authorized user. This means they will get a credit card in their name and access to your spending limit, but you are legally responsible for any charges they make. Obviously, this move works best when you have excellent credit and a strong history of on-time payments and you plan to continue using credit responsibly .
While this step can be risky if you’re worried your college student will use their card to overspend, you don’t actually have to give them their physical authorized user credit card.
In fact, they can get credit for your on-time payments whether they have access to a card or not. If you do decide to give them their credit card, you can do so with the agreement they can only use it for emergency expenses.
Encourage Them to Get a Secured Credit Card
Your child can build credit faster if they apply for a credit card and get approved for one on their own, yet this can be difficult for students who have no credit history. That said, secured credit cards require a refundable cash deposit as collateral are very easy to get approved for.
Some secured credit cards like the Ambition Card by College Ave even offer cash back1 on every purchase and don’t charge interest2. If your child opts to start building credit with a secured credit card, make sure they understand the best ways to build credit quickly — keeping credit utilization low and paying bills early or on time each month.
Opt for a Student Credit Card Instead
While secured credit cards are a good option for students with little to no credit get started on their journey to good credit, there are also credit cards specifically designed for college students. Student credit cards are unsecured cards, meaning they don’t require an upfront cash deposit as collateral, but charge interest on any purchases not paid in full each month.
Many student credit cards offer rewards for spending with no annual fee required as well, although these cards do tend to come with a high APR. The key to getting the most out of a student credit card is having your dependent use it only for purchases they can afford and paying off the balance in its entirety each billing cycle. After all, sky high interest rates don’t really matter when you never carry a balance from one month to the next.
Student Credit Cards…
“One of the safest ways for college student to build their credit by learning valuable money skills.”
Help Your Child Get Credit for Other Bill Payments
While secured cards and student credit cards help young adults build credit with each bill payment they make, other payments they’re making can also help.
In fact, using an app like Experian Boost can help them get credit for utility bills they’re paying, subscriptions they pay for and even rent payments they’re making. This app is also free to use, and you only have to set up most bill payments in the app once to have them reported to the credit bureaus.
There are also rent-specific apps and tools students can use to get credit for rent payments, although they come with fees. Examples include websites like Rental Kharma and RentReporters.
Make Interest-Only Payments On Student Loans
The Fair Isaac Corporation (FICO) also notes that students can start building credit with their student loans during school, even if they’re not officially required to make payments until six months after graduation with federal student loans.
Their advice is to make interest-only payments on federal student loans along with payments on any private student loans they have during college in order to start having those payments reported to the credit bureaus as soon as possible.
“Making interest-only payments as a student will not only positively affect your credit history but will also keep the interest from capitalizing and adding to your student loan balance,” the agency writes.
Of course, interest capitalization on loans would only be an issue with private student loans and Federal Direct Unsubsidized Loans since the U.S. Department of Education pays the interest on Direct Subsidized Loans while you’re in school at least half-time, for six months after you graduate and during periods of deferment.
The Bottom Line
College students don’t have to wait until they’re done with school to start building credit for the future, and it makes sense to start building positive credit habits early on regardless. Tools like a credit card can help students on their way, whether they opt for a secured credit card or a student card. Other steps like using credit-building apps can also help, and with little effort on the student’s part or on yours.
Either way, the best time to start building credit was a few years ago, and the second best time is now. You can give your student a leg up on the future by helping them build credit so it’s there when they need it.
20% APR. Account is subject to a monthly account fee of $2, account fee is waived for the initial six-monthly billing cycles.
College Ave is not a bank. Banking services provided by, and the College Ave Mastercard Charge Card is issued by Evolve Bank & Trust, Member FDIC pursuant to a license from Mastercard International Incorporated. Mastercard and the Mastercard Brand Mark are registered trademarks of Mastercard International Incorporated.
About the Author
Jeff Rose, CFP® is a Certified Financial Planner™, founder of Good Financial Cents, and author of the personal finance book Soldier of Finance. He was a financial planner for 16+ years having founded, Alliance Wealth Management, a SEC Registered Investment Advisory firm, before selling it to focus on his passion – educating the masses on the importance of financial freedom through this blog, his podcast, and YouTube channel.
Jeff holds a Bachelors in Science in Finance and minor in Accounting from Southern Illinois University – Carbondale. In addition to his CFP® designation, he also earned the marks of AAMS® – Accredited Asset Management Specialist – and CRPC® – Chartered Retirement Planning Counselor.
While a practicing financial advisor, Jeff was named to Investopedia’s distinguished list of Top 100 advisors (as high as #6) multiple times and CNBC’s Digital Advisory Council.
Jeff is an Iraqi combat veteran and served 9 years in the Army National Guard. His work is regularly featured in Forbes, Business Insider, Inc.com and Entrepreneur.