17-year-olds are on the brink of adulthood. It’s the perfect age to start establishing credit; after all, the sooner you get a credit score, the sooner you can take advantage of the benefits of good credit, which will give you a leg up through your entire adult life.
Whether you’re a 17-year-old looking into opening your first credit card or you’re a parent who wants to help their child establish credit as early as possible, you can start with the following four steps.
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1. Ask your parents to add you as an authorized user
Since you need to be 18 years old to open your own credit card, the easiest way you can start building credit at 17 is by becoming an authorized user on someone else’s credit card. This is a popular approach for building credit as a teenager because you don’t need to be a legal adult.
Becoming an authorized user is also a great way to build credit fast because the card’s full payment history will be quickly added to your own credit report and begin building up your score. You’ll also have access to the same line of credit as the primary cardholder, but you won’t be responsible for making any payments.
As a minor, the easiest way to become an authorized user is to ask one of your parents or your legal guardian to add you. You can also ask someone else you trust, but make sure that they have a good payment history—since their account records will be added to your credit report, you could end up establishing bad credit rather than good credit if they’ve missed payments in the past.
Other ways to get a credit card at 17
Apart from being an authorized user, the only other way you can get a credit card when you’re 17 years old is if you’re emancipated. Emancipation laws and stipulations vary by state, but as an emancipated adult, you may be able to sign contracts, including credit card contracts. 1
However, bear in mind that the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act) imposes restrictions on credit card applicants under the age of 21. You’ll need to either apply with a cosigner or prove that you’re financially independent (with your own source of income, i.e., a job) and can afford to pay your credit card bills on your own. 2
2. Check your credit scores and reports
A key part of credit building is monitoring your credit reports and scores for changes. Your credit reports won’t show much before you turn 18, but if you practice checking them while you’re still 17, you’ll form good habits. These will help you hit the ground running and build credit once you turn 18.
Here’s how to review your credit:
- Credit reports: You can request free copies of your credit reports from all three credit bureaus (Experian, TransUnion, and Equifax) at AnnualCreditReport.com. All minors aged 13–17 can request their credit reports online. 3 Parents can also request credit reports on behalf of their 17-year-old children, but they have to prove their status as their legal guardian. 4
- Credit scores: You’ll only get your first credit score once you actually have information on your credit reports (such as records of credit accounts). You’ll get a FICO score after using credit for 6 months. You can look up your credit score on FICO’s website or by using credit monitoring services such as Credit Karma (although these may display your VantageScore instead).
3. Practice good financial habits
Ultimately, the only way to establish good credit is to show that you can manage your finances and repay your debts. Even though you might not be able to get a credit card now, you can still get your finances into shape in preparation for when you can.
Sticking to a budget with your own money while you’re still 17 can help you avoid financial problems young people sometimes face when they get access to credit for the first time, such as spending more than they can afford to pay back and maxing out their credit cards.
Here are a few things you can do to get your finances in shape early in life:
- Open a checking or savings account (assuming you’re not emancipated, you’ll need your parent to open it with you)
- Practice using a debit card for small purchases the way you’ll eventually use your credit card
- Download a budgeting app
- Get in the habit of putting a set portion of any money you’re given into a savings account
4. Prepare to open your first credit accounts once you turn 18
Getting your first credit card or loan won’t necessarily be quick or easy. Make sure you understand what creditors and lenders require and what types of credit accounts are available to you. That will ensure that you’re prepared to submit your credit applications as soon as your 18th birthday comes around.
Establishing a source of income
Income isn’t one of the factors that affect your credit score directly. However, it will influence your eligibility for certain types of credit accounts in the following ways:
- Credit cards: As mentioned, to get a credit card at 18, you’ll need to either apply with a cosigner or submit evidence that you have a source of independent income that will allow you to repay your debts.
- Loans: Many lenders (such as auto loan and mortgage providers) look at your debt-to-income ratio when deciding what loan amount to approve you for. If you have no income, then you might not qualify for any loans at all.
Having a source of income will also help you keep on top of your bills and avoid making late payments on your credit accounts once you get them, which can seriously harm your credit score.
The simplest way to secure a steady income is to get a job, which you can do right now. You can also list regular government payments or public assistance (e.g., Social Security disability payments) as a source of income on credit applications. 5 6
Loans and credit cards for beginners
Few lenders will be willing to extend you credit if you have an insufficient credit history. However, there are a few credit accounts you’ll be able to qualify even with no credit score:
- Secured credit cards: Most people who are building credit for the first time can qualify for secured credit cards because they don’t involve as much risk for creditors as traditional unsecured credit cards, which makes them good credit cards to get at 18. This is because they require a security deposit equal to the credit limit on your card.
- Credit-builder loans: Banks and credit unions sometimes offer credit-builder loans to people with bad credit scores or those who are trying to build credit with no credit history. These aren’t like traditional installment loans because you only receive the money after you’ve made all the agreed-upon payments.
- Federal student loans: Federal student loans don’t usually require a credit check or cosigner, which makes them one of the easiest types of credit to get at 18 years old. 7 Although student loans contribute to your credit, they involve a long-term financial commitment, so you should only apply for them when necessary.
