Quick note: If you want to skip ahead and start building credit with a no-cost metal credit card that’s built to make sure you never pay fees or interest and never overspend, sign up for Cred.ai card today! If you spend $1,000+ per month total (i.e. groceries, day-to-day items, student loan payments, etc.), this card is for you! 


If you have a low credit score, you’re far from alone. Most people start their adult lives with no credit history, which is a real problem because you need a credit history to do a lot of important things like rent an apartment, buy a car, get better rates on your student loans, or start a new cell phone contract. 

But, to be honest, building credit for the first time is confusing! You have to have an existing credit history to be approved for a new line of credit…but you can’t build your credit history if no one is willing to give you a line of credit…

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Does that make sense to you? Maybe not. But don’t worry! In this guide, we’ll be answering common questions you might have about credit, like: 

  • What determines your credit score?
  • Where can you get official credit reports for free?
  • What’s the average credit score for someone your age? 
  • How long does it take to build credit? 

We’ll also be sharing seven of the best and fastest ways to build credit! After reading, you’ll have a clear idea of what you can do to improve your financial future by taking simple steps. 

But, if you’re wondering why any of this matters in the first place, you’re also not alone. So, let’s start by clearing up that doubt before diving into everything else!

Why Is It Important to Have a Good Credit Score?

Having a good credit score is important because it’s the basis for your financial future. If you have a good credit score, you’ll have access to the best rates, terms, and conditions for things like auto loans, credit cards, and apartment leases. Just using your student loans as an example, you could save THOUSANDS OF DOLLARS every year by having a good credit score.

Why? Because lenders will trust you can pay them back and because of that, charge you less interest. A bad credit score, on the other hand, will have the opposite effect.

So, how do you get a good credit score? Well, it doesn’t happen by accident. Your score is calculated according to 5 factors.

What All Goes Into a Credit Score? 

Credit bureaus calculate your credit score by looking at 5 factors: 

  1. Your payment history (how often you make on-time payments for your bills) 
  2. Your credit utilization (how much credit you owe relative to how much credit you have available to spend)
  3. Your credit history (how long you’ve had one or more credit lines)
  4. Your credit mix (how many types of credit— car loans, student loans, credit cards, etc. —you have) 
  5. Your new credit (how many new credit lines you’ve recently opened)

how is fico score calculated image

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Where Can You Check Your Credit Score Accurately Online? 

There are a number of websites that give you free credit score reports, but they aren’t always accurate. A common place to get your score is directly from the three credit bureaus that give you an official score:

  1. TransUnion
  2. Experian
  3. Equifax

Those credit agencies will charge you a fee to check your score. But you can also get a free report from each of the three credit bureaus one time per year by visiting  AnnualCreditReport.com

If you want to check your score again later without paying, you can also use apps like Mint, Credit Sesame, or Credit Karma. If you have a bank account or credit card, you may also be able to request a free report from them. None of these alternative options are 100% accurate, but at least they’re free!

What Is the Average Credit Score for Young Adults?

There are two main models to score your credit: FICO and VantageScore. Under both models, the highest credit score you can get is 850. But, as a beginner building credit, no one expects you to have a perfect credit score! 

According to Value Penguin, the average credit score for people aged 18-23 is 674. This would be considered a “Good” credit score on the FICO model: 

  • 800 to 850 – Exceptional
  • 740 to 799 – Very Good
  • 670 to 739 – Good
  • 580 to 669 – Fair
  • 300 to 579 – Very Poor

If you’ve never opened a line of credit and your starting score falls in the “Fair” or “Very Poor” range, speak with a financial professional. There could be an error on your credit report or you might be a victim of credit card fraud

Chart showing average credit score by generation according to Experian credit bureau

How Long Does It Take to Establish Credit?

The average time frame to build credit from scratch for someone in their 20s is around two years. It takes around two years because you need to have at least one year of credit history and a few accounts with established payment history. 

But there are a few things you can do to speed up the process a bit… 

7 of the Best Ways to Build Credit as a Beginner

As a college student or recent grad, building credit will take time, patience, and consistency! But here are 7 easy ways to build your credit score: 

#1 Get a credit card that doesn’t let you overspend, pay fees or accrue interest charges (seriously, this exists!)

The only way to improve your credit is by getting credit, which becomes a catch-22 because often this leads to first-time credit mistakes like overspending, accruing interest charges due to late payments and fees – and this in turn drives your credit down. This is not what you want.  

Luckily, there are now tech companies stepping up to actually help those in need of building credit. Our favorite is Cred.ai, which offers a high-tech and premium metal card that BUILDS YOUR CREDIT while protecting you from overspending, fees, or interest charges. Better yet, there is no monthly or annual fee. Amazing!

If you even spend $1,000+ per month (think about groceries, day-to-day items, student loan payments, etc.) and have even a little bit of monthly income (this can include a full-time or part-time job, gig-work, or even money your family gives you) – we recommend signing up.

#2 Become an authorized user on a family member’s credit card 

Becoming an authorized user is a great way to build credit if you have someone in your family that will allow it. Why? Because if you become an authorized user, you get to take advantage of that person’s credit history. It’s also pretty easy! 

To make you an authorized user, your family member just needs to contact the credit card issuer by phone or through the credit card’s online platform. They’ll also need your name, address, date of birth, and social security number.

#3 Apply for a credit-builder loan 

A credit builder loan is a loan that’s designed for people who don’t have a high enough score to qualify for traditional financing options. These types of loans typically offer lower interest rates and more manageable monthly payments. And since you’ll have less trouble making payments, this can really speed up your progress towards building good credit!

Where can you get a credit builder loan? You can apply for a credit builder loan at your bank or credit union. Some websites also offer them, but you should make sure they’re reputable first before giving them any of your personal information.

#4 Pay your bills on time every month 

When building your credit, it’s important to stay on top of your bills. If you don’t, it may end up hurting your credit score in the long run. Bill collectors may report late payments to credit bureaus. 

And this includes paying your student loans on time if you’re a recent grad. As a reminder, those payments will be due again starting February 1 according to the latest student loan update from the Biden administration.  

One or two months of missed payments might not have a huge effect on your credit score. But consistently paying bills late can quickly drop your scores and affect the interest rates you’re offered for future accounts. If you need help, consider using an app like Truebill to help you manage your bills and track your spending. 

#5 Avoid opening too many accounts at once 

When establishing your credit, you’re likely to receive a lot of credit card offers from banks, your favorite stores, and other private lenders. Sometimes, those offers will seem like a good idea – especially if you can get one with perks or a low-interest rate. But don’t be fooled by the idea of “easy credit” like many students and recent grads! 

Having too many accounts open at once will make it more difficult to build your credit score. Why? Because each of these cards represents another account that could potentially go into debt. 

On top of that, each time you apply for a new credit account, it shows up on your credit report as an inquiry. Too many inquiries around the same time can have a negative impact on your score in the short term. 

#6 Keep unused accounts open 

At some point, you may have credit accounts with no balance that you aren’t actively using. And you may think it’s a good idea to close those accounts. But it’s not — at least not when it comes to building your credit.

Why? Because keeping those accounts open will help your credit history continue to grow. And, as we mentioned earlier, a long credit history positively contributes to your overall credit score. 

Just remember: there is a difference between keeping them open and actually using them. If you find yourself getting tempted by the bank offering new cards or increased credit limits, it might be better to just close the account. They can be costly if not managed correctly.

#7 Maintain a low credit utilization 

When you open your credit accounts you’ll have a combined maximum credit limit across all of your different accounts. But you want to make sure you’re only using what you need. This will help you maintain a low credit utilization, which, as you may remember, accounts for 30% of your credit score.

Keeping your credit utilization low helps to build credit because it shows lenders that you can responsibly manage your available credit. If there are accounts with high balances, try transferring some of the balance to lower interest rate cards. This will help you work on paying the principal balance down a lot quicker. 

Final Thoughts

A good credit score takes time and patience to achieve! But as we’ve shown in this post, some of the best and fastest ways to build credit include:

  1. Get a credit card that doesn’t let you overspend, pay fees or accrue interest charges
  2. Become an authorized user on a family member’s credit card 
  3. Apply for a credit-builder loan 
  4. Pay your bills on time every month 
  5. Avoid opening too many accounts at once
  6. Keep unused accounts open 
  7. Maintain a low credit utilization 

As a beginner, it may take you two years to reach a “Very Good” or “Exceptional” credit score. But if you apply those lessons and continue to learn about financial literacy, you’ll be well on your way! 

And if you want more financial tips, check out the rest of our blog where we talk about topics like how to get started in investing, the best ways to make extra money, and how to win scholarships like the Fulbright Scholarship!

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