How Early In Life Can I Have A Credit Report?

“John, I’m 16 years old and I’m already very interested in credit and you won’t guess why.  My parents have terrible credit and I want to make sure I don’t follow! I know I’m only 16 but how early can I have a credit report?”

It has become more difficult for young adults to obtain credit because the CARD Act put restrictions on the income qualification for credit cards for people under 21.  The intent was to stop college students and young adults from using their parent’s income to qualify for credit without the means to pay on their own. But the side effect is that now it’s hard to get a card unless you have a co-signer or a job.

The legal age to start a credit report is 18.  Some children have a credit report prior to that time, because their parents’ added them as an authorized user on their credit card.  A minor could also have a credit report and be unaware that there is one, because they are a victim of identity theft.

There are several ways to begin building credit. The key ways to build credit are authorized user, having someone co-sign for a loan, student loans, secured card, and retail credit cards.

Some parents add their children as an authorized user to help build credit, for shopping purposes, or for college expenses. In these situations, the date the account was opened can be much older than the child. This account begins the credit report for the child.

An authorized user has permission to use the account but is not responsible for payment. The history of that account is also on the credit report of the child. If the parent’s payment history is good, the child will have good credit.  It also works the other way, if the parent has poor credit, so will the child.  If that is the situation, it is advisable not to add the child to the account.

Student loans are a good way to build credit although I’m not a huge fan of student loans.  Even though they are deferred, they will be reported on the credit report.  Student loans are usually very large loans which take years to pay.  If you pay them on time, this helps you build credit.  A key issue with student loans is that the student has to begin repaying the loan six months after leaving school, even if they don’t have a job.  It is almost impossible to get out of paying a student loan — even filing for a bankruptcy.

Secured credit cards usually have a limit of up to $500. You open a separate account for the same amount as your credit limit, which “secures” the account.  If your limit is $500, you open an account for $500, which can’t be accessed by you.   The issuer has very little risk, because they can use the other account to pay off the account, if you default.  There is usually an annual fee or monthly fee for this account.  If you are able to get a secured card, you should select the card issuer that will let you convert to a standard credit card after a year of paying on time and reports this account to the credit bureaus.  You should charge very little on it and pay it in full to build credit.

Some retailers may let you apply for their credit card at a very low credit limit, but the interest rate will be high.  This may help you start a credit report and build credit.  It is best not to charge much on it and pay it off in full each month.

It isn’t easy to start a credit report without being an authorized user or someone co-signing for you, but some creditors will work with you.  Once you get credit started, it becomes easier to get credit.  That is, if your credit is good.

Credit Reporting Expert, John Ulzheimer, is the President of Consumer Education at, the credit blogger for, and, founder of, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and, John is the only recognized credit expert who actually comes from the credit industry.  You can follow John on Twitter here

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