Credit Building

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Starting from zero

Without a credit history, lenders have little to go on, which can make it hard to get approved for credit or rent an apartment. The good news: building credit follows a clear, predictable path. Open the right starter account, use it lightly, pay on time every time and let time do the rest.

Tools for building credit

• Secured credit card: you provide a refundable deposit that usually becomes your credit limit. Used responsibly, it reports to the bureaus like a regular card.
• Credit-builder loan: offered by many credit unions and community banks. The loan amount is held in a savings account while you make payments, then released to you.
• Authorized user: a family member adds you to their well-managed card.
• Student or starter cards: unsecured cards designed for limited credit histories.
• Rent reporting: some services and landlords report on-time rent payments to one or more bureaus.

Credit building tips

1. Pay on time, every time — payment history is the largest scoring factor.
2. Keep utilization low — try to use a small share of your limit and pay the balance in full.
3. Don’t apply for many cards at once.
4. Keep your first accounts open to lengthen your history.
5. Check your reports at AnnualCreditReport.com to make sure accounts are reported correctly.

Read our full guide on how to build credit and compare starter options on credit cards for beginners.

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