5 Steps to Start Building Credit at 19 Years Old9 min read

Table of Contents

The Basics

A 19-year-old focused on building their credit score, what a great start! If you continue focusing on the things that actually matter in life (like your credit score), it will surely be a good one. 

If you are in the U.S., Canada, or the UK, the first step is to download Credit Karma. We are not affiliated with them and don’t earn anything in return for promoting them. We just personally use and love their service.

Because we cannot improve what we can’t measure, our first job is to determine a baseline. After you download Credit Karma, you can check out how you’re doing at any time, with a graph to visually show you. 

Your credit score ranges from 300-850, and assuming that you have an average financial history, your score is likely in the ballpark of 600. Generally speaking, 600+ is considered average, 700+ is considered good, and 800+ is considered excellent. If you recently turned 19 years old, setting a goal to be at a 700 credit score is very realistic by the time you turn 20.

You have maybe heard that checking your credit score will hurt it. This is only half true, as a hard inquiry into your credit score will hurt it. When you check your score on Credit Karma, it is a soft inquiry, so it will not affect it.

Once you know what your credit score currently is, you’ll have your benchmark, and will be able to tell if you are progressing or not. 

If you currently don’t have a credit card, that’s your number one mission if you want to learn how to build your credit at 19 years old. If you are currently working, there are many great options for starter credit cards, to establish some credit for the better cards out there.

If you are in school, don’t fret. There are also many great student credit card options, which will be a great bridge into the more established credit cards section.

Now that you’re set up with a credit card, it’s time to learn how to effectively utilize this tool of credit. We’re going to learn how to build our credit without racking up insane amounts of credit card debt or spending more money than we need to.

Make Sure You Stay on Top of Your Payments

Ultimately, the purpose of building credit is to show creditors that you will be good to pay back a loan if you need one. So naturally, one of the most important factors to remember is to pay every month in full, on time.

If you’re consistently behind on your credit card payments, and/or falling behind in credit card debt, this is the most important thing to focus on. Getting ahead in terms of your credit score will be a difficult task if you’re not paying your balances.

This is the fundamental purpose of your credit score, to be a “score” of how likely you are to be good for a loan, so make sure you don’t have unnecessary balances past due.

Although credit card welcome offers can be fantastic, they are almost never worth paying off 19.99% interest rates on your impulse purchases.

You need to always keep in mind the ultimate reason you care about your credit score—saving money some day. Don’t squander that by racking up any credit card debt. This perfectly leads us to the next point…

Setup Preauthorized Bill Payments

Of all of these tips, this is (in my opinion) the most important. With most credit card issuers, you can set it up so that when your bill needs to be paid, it’s automatically taken out of your bank account in full. 

I seriously wonder why more people don’t use this feature. It is so handy to not need to consciously think about paying your bills on time, provided you have the money in your bank account. 

All you need to do is look around on Google to find out how you can set this up with your credit card, or give the customer service number a call on the front or back of your credit card.

Work on Your Utilization Rate

Your credit utilization rate is a term you may have never heard before, but you will definitely want to memorize it and its uses. Your utilization rate is the percentage of your credit limit that you are charging to your card every month.

For example, if you have a $1,000 limit on your credit card, and you consistently spend $800/month on your credit card, that means that you have a utilization rate of 80%—800/1000 x 100 = 80%. 

This is a poor utilization rate, and will definitely lower your credit score. You should aim for less than a 30% utilization rate on all of your cards, and generally speaking, the less the better.

In the above example, you would be much better off opening 3 more cards, each with $1,000 limits, and evenly splitting your charges among these 4 cards. Your new credit utilization rate would be 20%, as you are spending only $200/month per card.

On the flip side, you should aim to keep none of your cards at a 0% utilization rate either. If you have recently gotten new credit cards and now find yourself holding a “useless” credit card, instead of canceling it or letting it sit unused, set up one of your preauthorized services on this card, just to keep it at a > 0% utilization rate.

I recently got several new credit cards, so my old student card was collecting dust on my dresser. I went into my Spotify account, changed my payment details to this card, setup preauthorized bill payments from my bank account, and forgot about it. 

Just because of these 20 minutes of work, it’s helped me maintain sky-high credit as a 20-year-old.

Grow Your Average Account Age

Another factor that will affect your credit score is your average account age. Because you’re starting at 19 years old, you are ahead of the curve in this section. 

When you are approved for a new credit card, your credit score will typically see a hit, both due to the hard inquiry and your lowered account age. However, this will usually subside within a few months, after your trustworthiness is put on display from all of your payments made.

Because you’re young, applying for a new card every 6 months, which will temporarily lower your credit score, isn’t a big issue. By the time that you are looking to get a mortgage, the dip should have long subsided by then, and you will be a prime borrower in the eyes of the bank.

However, if in the future you have a bare-bones credit card that you want to get rid of, you can look into product switching to extend your average account age. 

What that means is that if you can find a better card, through the same issuer; e.g. Citi, American Express, etc. then they can just transfer your credit limit from this bare-bones card to the card you’d like.

What this will do is two things; First, there will be no need for another hard inquiry, because they are simply transferring your limit from one card to another. It will also extend the average age of your accounts, which will boost your credit in the long run.

Make sure that you always have your average account age in mind when considering a new credit product, but know that it is sometimes unavoidable. 

Credit Account Mix

The toughest factor to build credit for most 19-year-olds is having a good credit account mix. This means having a variety of credit products; e.g. credit cards, mortgages, loans, etc.

Students are usually “lucky” here—your student loan is a credit product, so it is positively affecting your credit (provided you’re paying it off on time, in full). 

Other ways for 19-year-olds to get a wider variety of credit products is through an auto loan, or otherwise “personal” loan from the bank. Remember, boosting your credit by an additional 30 points is NOT worth it to fall behind on any type of payments. Live within your means, but utilize credit to the extent that you are able.

Luckily, this only factors for about 10% of your credit score, so if you are unable to get a wide variety of credit products it is not the end of the world.

The 5 Steps to Building Credit at 19 Years Old

1. Get a credit card—either a starter card or a student card

2. Pay your bills in full, on time. Setup preauthorized payments

3. Keep your utilization rate (percent of credit limit that you spend) under 30%

4. Try to extend your average account age as much as you can

Remember, you’re doing this “less than fun” work now so that in the future you’ll be able to use credit for all sorts of awesome perks. Or, for the purpose of getting a great loan or mortgage when the time comes. 

You’re light years ahead of most people by the time that they turn 19, so pat yourself on the back for that! And just remember that your primary purpose on this planet is to live your life, not to build your credit score.

Just remember: don’t work on building credit at 19 thinking it will make you happy; work on yourself to become more happy, and (separately) build your credit score. 

Josiah Brown

Josiah Brown is a 20-year-old Entrepreneur and writer who is on a life-long journey of experiencing and learning.