How to build a good credit score at 18

If you’ve recently celebrated your 18th birthday, congratulations! It’s a huge milestone. While your credit score is probably the last thing you’re thinking about right now, it is something you might want to consider now that you are taking your first steps into adulthood.

It can all feel a bit scary though, right? Especially when it comes to handling money successfully and understanding how the financial system works. But it doesn’t need to be. If you feel like it's time to start thinking about your financial future — and if you’re reading this, you probably are — building a good credit score is a great place to start.

But where do you begin? How does a young person build credit? We’ve got you covered with eight simple and effective tips to help you start building your credit score.

Wait, do I have a credit score at 18?

Yes, but it’s not automatic. To get a credit history (which is a big factor for calculating your credit scores) you need to have used credit. The record of how you’ve managed and repaid for your credit agreements (i.e. paying on time, every time) is super important. All of this historical evidence will affect your credit scores.

Your credit history is reported to Experian, Equifax and TransUnion — these are the three main credit reference agencies (CRAs) in the UK — who each create a report and a score for you.

In order to get a credit score at 18, you have to start using credit. If you want a mortgage, credit card or loan one day, you’ll want to work to get that score as high as possible.

OK, what is your credit score when you turn 18?

The truth is, there isn’t a set score number that you start with at 18. You don’t begin on zero, for example. You may find that the CRA could struggle to find enough financial data about you the first time you try to check your credit reports.
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According to Experian (Oct, 2021) the average score for 18-20 year olds is 823, against a national average of 797. Younger people often have higher credit scores on average because they have fewer financial responsibilities. But average scores drop significantly as you get older, so understanding how it all works and forming good credit habits now will serve you well later. Your reports are influenced by how you manage your money over time, so start things on the right foot by using the following tips.

8 tips for how to get a good credit score at 18

1. Register to vote

One of the best ways for a young person to build credit is by registering to vote to get your name and address onto the electoral roll. That’s how lenders check your identity when you apply for credit. You can register to vote online on the government website. It only takes five minutes — making it the quickest way as well — so why not get on it now?

Note: You can opt out of the “open register” (called the ‘“edited register” if you’re in Northern Ireland) record without affecting your credit score or ability to vote.

Remember, though — if you’re heading off to university, or planning to leave home soon, you’ll need to make sure you update these details whenever you move.

2. Get a bank account

It’s really important to open up a bank or building society account if you can. It doesn’t directly help you with your credit score, but it's still an essential step in building your financial future. You’ll need a current account to manage your personal finances effectively. And the sooner you start using it (responsibly!), the better.
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Firstly, having and using your account makes you appear more financially stable and reliable to lenders. It also shows that you’re a UK resident.

Secondly, a bank account will help you to manage your money better — with things like Direct Debits (more on that later) and standing orders — so you can avoid making the sort of mistakes which can hurt your history.

3. Get started with Loqbox

How does the idea of building your credit score as you save yourself a pot of money sound? We understand it can take a while to get up on your feet after leaving school, but one of the best things you could do is create a safety net of savings.

Whether it would be for a future emergency fund or for travelling around the world, using a Loqbox membership to reach your savings goal can help you build your credit score as you go. Here’s how it works:

1. Decide how much you can afford to save each month for a year, and we’ll issue you a loan for the total amount, no credit check needed. We then keep that amount locked away for you until the end of the 12 months.
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2. Each month, your savings will pay off the loan instalments. Setting this up on payday would mean you never miss the money or accidentally spend it.

After the year, you’ll have a pot of savings to withdraw and a shiny new credit score. Hell yeah!

Your overall financial behaviour will also impact your score, but as we want to make sure you feel confident with money, we’ve put together these golden rules to understand more about what can affect your credit scores and how to improve them. Plus, during your first year of membership, you’ll receive an email series to teach you everything you need to know about the financial system.

‍Improvements to your credit score are not guaranteed.

4. Make sure your details are correct

It’s a good idea to check your details and information with Equifax, Experian and TransUnion to make sure that they have everything accurate. Mistakes on your credit reports can hurt your scores unnecessarily. You can find out more about how to fix errors on your credit report here.‍

5. Apply for credit (but not all at once)

One of the best ways to build a solid borrowing history is to actually use credit (responsibly). Whether that’s getting a rent reporter, getting a credit card, or a mobile phone contract, while you’re starting out — get into good habits of paying back what you owe as agreed.

Spreading out your applications to be once every six months is also important for maintaining a good score. Because hard credit checks often come with new accounts and credit agreements, and these cause a temporary dip in your score.

After six months the score should start to rebuild itself when the company you’re borrowing from reports to the CRAs that you’ve been paying back what you owe on time, and without any missed payments. ‍

6. Don’t immediately re-apply if you get declined

If you’re declined when you apply for credit, like a card or a loan, it’s important not to immediately try again with another company. Constantly attempting to borrow and being rejected will hurt your score so leave some space between unsuccessful applications.

This is another reason why you should keep an eye on your scores before you apply for credit. They’ll give you a summary of how lenders might see your report. If your score is low, you could consider not applying until you can improve it or looking for alternative options for people with little or bad credit.

7. Pay your bills on time

One of the most important influences on your credit score is your payment history. Make sure you pay your bills on time every month, including your credit card and energy bills, and any other bills you have. Late payments can severely damage your history (and therefore your score) , so make sure you stay on top of them.

A great way to avoid missing payments is by setting up Direct Debits that automatically pay your bills. This means you don’t have to worry about forgetting or missing payments through human error. Let the robots do it for you! You can read more about how missed payments affect your credit score here.

8. Low credit utilisation

Something lenders look at is how much of your available credit you’re using. This is known as your credit utilisation. Ideally you want to keep it low at 25-30% of your available funds. Always make sure you cover your monthly payments as this can really help improve your score. It’s super important to use the credit card wisely and avoid overspending.

If you’d like a simple way to take advantage of low credit utilisation, it’s part of the £2.50 a week Loqbox membership. Check out our clever tools here.

How long does it take to build credit at 18?

Building good credit is a marathon, not a sprint. Don't expect to have an excellent score overnight. It takes time and patience, but it's worth it. By following these tips, you'll be on your way to establishing a solid financial history and building a bright financial future for yourself. It's never too early to start building your credit history once you’ve turned 18. And remember, you’ve got this!