How to build a good credit score at 18

Are you just turning 18 and thinking, “what's my credit score”? If you’ve recently celebrated your 18th birthday, congratulations! It’s a huge milestone.

But taking the first steps into adulthood can also be a bit scary, right? Especially when it comes to how to handle money successfully and understanding how the financial system works. Maybe it's time to start thinking about your financial future, and building a good credit score is a great place to start.

How does a young person build credit? Do I have a credit score at 18? If you’re wondering about the best way for a young person to build credit, Loqbox has 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.

And depending on how well you manage your credit agreements (i.e. paying on time, every time), this historical evidence will affect your credit scores.

Your credit history — the record of how you manage and repay your money — is reported to Experian, Equifax and TransUnion, who each create a credit report for you (these are the three main credit reference agencies in the UK and they are also responsible for generating your three respective credit scores).

Simply put — in order to get a credit score, 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 credit score number that you start with at 18. You don’t begin on zero, for example. You may find that that the credit reference agency could struggle to find enough financial data about you the first time you try to check your credit reports.

According to Experian (Oct, 2021) the average credit 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 credit scores are generated 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 (and the quickest) 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, 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 that 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.

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), standing orders and avoid making the sorts of mistakes that can hurt your credit score.

3. 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 report can hurt your credit scores unnecessarily. You can find out more about how to fix errors on your credit report here.

If you don’t know what your credit score is, you can check it with each of the three main credit reference agencies for free and without hurting it, using these great services:

ClearScore (uses Equifax data)*
Experian App (uses Experian data)
Intuit Credit Karma (uses TransUnion data)

*For transparency, if you sign up for ClearScore using this link, we will receive a small commission, just to let you know! 

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

The best ways to build a good credit history is to actually use credit (responsibly). So 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 credit 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 credit reference agencies that you’ve been paying back what you owe on time, and without any missed payments. 

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

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

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

6. Pay your bills on time

One of the most critical factors in your credit score is your payment history. Make sure that 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 credit 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. 

7. Low credit utilisation

Always Make sure you make your monthly payments as this can really help improve your credit score. It’s super important to use the credit card wisely and avoid overspending. 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 credit. 

If you’d like a simple way to take advantage of low credit utilisation, check out Loqbox Grow here. It’s part of the £2.50 a week Loqbox membership.

8. Get started with Loqbox Save

How does the idea of building your credit score as you save yourself a pot of money sound? We understand that it takes 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 Loqbox Save 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 that total amount, no credit check needed. We then keep that amount locked away for you until the end of the twelve months.

  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.

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

You can even use it in conjunction with Loqbox Grow and Loqbox Rent to maximise your score building. Woohoo!

Improvements to your credit score are not guaranteed. 

Your overall financial behaviour will also impact your credit 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 year of Loqbox Save, you’ll receive an email series to teach you everything you need to know about the financial system

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 credit 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 credit history and building a bright financial future for yourself. Remember that it's never too early to start building your credit history once you’ve turned 18.

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Give your credit score a boost
For just £2.50 a week, you could see your credit score rise by up to 300 points in the first three months
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Improvements to your credit score are not guaranteed
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A letter that reads "Your special delivery of financial know-how"
Subscribe to Loqbox Inbox
Sign up for our monthly emails and we’ll do our best to help you find your way on your journey with money
Subscribe
Two lightning bolts
Give your credit score a boost
For just £2.50 a week, you could see your credit score rise by up to 300 points in the first three months
Get started
Improvements to your credit score are not guaranteed