To generate a FICO score, you generally need at least one account that has been open for six months and has been reported to the bureaus within that time. Some newer scoring models can score you sooner. Either way, the first step is getting an account that actually reports to Equifax, Experian, and TransUnion.
7 Steps to Build Credit From Scratch
- Check your credit reports first. Get your free reports at AnnualCreditReport.com. If you truly have no history, they’ll be empty. If they aren’t, look for errors or accounts you don’t recognize, since identity theft can affect people who have never used credit.
- Open a secured credit card. A secured card requires a refundable cash deposit, which usually becomes your credit limit. You use it like any other card, and the issuer reports your activity to the bureaus. It’s one of the most reliable ways to start. Before applying, confirm the card reports to all three bureaus and check the fees. See secured vs. unsecured credit cards for the trade-offs.
- Consider a credit-builder loan. With a credit-builder loan, the lender holds the money in an account while you make monthly payments. Once you’ve paid it off, you receive the funds. Credit unions and community banks often offer them. Each on-time payment is reported, which builds your payment history.
- Become an authorized user. If a family member or trusted friend has a card with a good payment history, ask to be added as an authorized user. Their account history may appear on your report. This only helps if the issuer reports authorized users to the bureaus, and it works both ways, since missed payments on their account can hurt you too.
- Look at student or starter cards. Some issuers offer unsecured cards designed for students and people with limited credit. Approval isn’t guaranteed, and terms vary, so compare annual fees and APRs. Our guide to credit cards for beginners explains what to look for.
- Ask about rent and utility reporting. Rent and utility payments usually don’t appear on credit reports. Some landlords and third-party services will report rent payments, and some scoring products can factor in bill payments. It’s optional, but it can help if you have little else on file.
- Pay on time and keep balances low. Payment history is the biggest part of your score, so set up autopay for at least the minimum payment. Try to use less than 30% of your limit, and less than 10% if you can. Read more in our guide to credit utilization.
Common Mistakes to Avoid
- Applying for many cards at once. Each application can cause a hard inquiry.
- Carrying a balance to “build credit.” You don’t need to pay interest to build a score. Paying your statement balance in full is best.
- Maxing out a low limit. A small limit fills up fast, so use the card for one or two small recurring bills.
- Closing your first card. Keeping it open preserves your credit history, as long as it has no annual fee.
A Simple Plan for the First 12 Months
- Month 1: Open a secured card or credit-builder loan and set up autopay.
- Months 2–6: Use the card for a small monthly bill and pay the statement in full.
- Months 6–12: Check your score, then ask your issuer whether you qualify to upgrade to an unsecured card and get your deposit back.
Frequently Asked Questions
Can I build credit without a credit card?
Yes. A credit-builder loan, an authorized-user account, or reported rent payments can all help, though a well-managed card is usually the fastest route.
What is the fastest way to build credit?
There’s no instant fix. Opening an account that reports to the bureaus, paying on time, and keeping utilization low is the quickest reliable approach.
Does having no credit hurt me?
It isn’t the same as bad credit, but it can make approvals harder and may lead to higher deposits for utilities or rentals.
What credit score should I aim for?
Many people aim for 670 or higher, which is generally considered good. See what is a good credit score for the full ranges.
Disclosure: This article is for educational purposes only and is not financial advice. Some links on this site may earn us a commission at no cost to you. Read our affiliate disclosure and full disclaimer. Card terms change often, so confirm current rates and fees with the issuer.