How to Start Building Your Credit at 17

A credit score serves as a numerical representation of an individual’s financial reliability, typically ranging from 300 to 850. Lenders and creditors rely on these scores to assess the likelihood of timely bill payments, influencing decisions on loan approvals and interest rates. A higher score generally leads to more favorable terms for financial products, such as credit cards, auto loans, and mortgages. Building a positive credit history is an important step toward achieving future financial goals, including renting an apartment or securing a car loan.

Legal Foundations for Credit Access

In the United States, individuals must be at least 18 years old to enter into legal contracts, such as credit card or loan agreements. The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 further impacts young adults under 21. This act requires individuals under 21 to either demonstrate an independent source of income sufficient to make payments or have a co-signer.

Many major credit card issuers no longer allow co-signers, making proof of independent income a common requirement for those aged 18 to 20. Consequently, a 17-year-old cannot directly apply for a credit card or loan as a primary applicant. Building credit at this age often involves indirect methods.

Establishing Credit Through Others

A primary method for a 17-year-old to begin establishing credit is by becoming an authorized user on an adult’s existing credit card account. An authorized user receives a card linked to the primary account, allowing them to make purchases. The primary account’s payment activity can then be reported to credit bureaus, appearing on the authorized user’s credit report. This helps build positive credit, provided the primary account holder manages the account responsibly.

For this strategy to be effective, the primary cardholder should have a history of on-time payments and maintain low credit utilization. Issuers require the authorized user’s name and date of birth to add them to the account, and sometimes a Social Security Number. Confirm the credit card issuer reports authorized user activity to credit bureaus for it to impact the authorized user’s credit profile. If the primary account holder makes late payments or carries high balances, it can negatively affect the authorized user’s credit.

Direct Credit Building Options

Upon turning 18, individuals gain access to direct credit-building products. A common option is a secured credit card, which requires a cash deposit, typically ranging from $200 to $500, that often serves as the credit limit. The deposit acts as collateral, reducing risk for the issuer. Regular, on-time payments on a secured card are reported to credit bureaus, contributing to the cardholder’s credit history.

Student credit cards are another option for those aged 18 and older enrolled in college or university. These cards are designed for students with limited or no credit history and may have lower credit limits. To apply, proof of enrollment is required, along with proof of income if the applicant is under 21. Income can include earnings from a job, work-study programs, or an allowance from a family member.

Credit builder loans offer a different approach. The lender does not provide funds upfront. Instead, the loan amount is held in a secured savings account or Certificate of Deposit (CD) while the borrower makes regular monthly payments. These on-time payments are reported to credit bureaus. Once the loan is fully repaid, the borrower receives access to the held funds.

Beyond Traditional Credit Accounts

Beyond traditional credit accounts, several alternative methods can help build a credit profile. Rent reporting services allow on-time rent payments to be reported to credit bureaus. Rent payments are not typically included in credit reports unless reported through a specific service. Some services can report up to 24 months of past payments, boosting a credit score. These services may require landlord details and proof of payment.

Utility bill reporting can also contribute to a credit history. While most utility companies do not automatically report positive payment history, services like Experian Boost allow individuals to link bank accounts to include on-time payments for utilities, telecom services, and streaming subscriptions in their Experian credit report. These services report payments that would otherwise not impact a credit score. Financial apps are also emerging that analyze bank transactions to identify recurring payments and report them to credit bureaus.