How-to
How to Build Credit From Scratch
🇩🇪 Diesen Artikel auf Deutsch lesenStart with a secured credit card or a credit-builder loan, use it lightly and pay the full balance on time every month. Becoming an authorized user on a family member's well-managed card can also help. Most people can establish a credit score within about six months of their first account reporting.
Young adults, new immigrants and people who have always paid cash often have a “thin” or empty credit file. Lenders can't judge risk without history, so building it is the first step.
Step by step
- Check your credit reports
Get your free reports at AnnualCreditReport.com to see if any file exists and check for errors.
- Open a secured card or credit-builder loan
Choose one with low fees that reports to Equifax, Experian and TransUnion.
- Use it for small, regular purchases
Put one subscription or a small monthly bill on the card.
- Pay in full and on time
Set up autopay for the full statement balance. Payment history is the most important factor.
- Keep balances low
Low utilization relative to your limit helps your score.
- Graduate to an unsecured card
After 6–12 months of on-time payments, ask to upgrade or apply for a regular card.
- Avoid many applications at once
Several hard inquiries in a short time can lower a young credit score.
Starter options compared
| Option | How it works | Watch out for |
|---|---|---|
| Secured credit card | Deposit becomes your credit limit | Annual fees; make sure it reports to all three bureaus |
| Credit-builder loan | Payments are saved and released at the end | Interest and fees |
| Authorized user | Added to someone else's card | Their late payments can hurt you |
| Student card | Unsecured card for students | Low limits, high APR |
Frequently asked questions
Do rent and utility payments help build credit?
Some services can report rent or utility payments, and some newer scoring models include them. Check whether the lenders you care about use those scores.
How long until I have a good score?
A score usually appears after about six months of reporting. Building a strong score takes a year or more of on-time payments.