To build credit from scratch, open one starter account that reports to the credit bureaus, such as a secured credit card or a credit-builder loan, use it lightly and pay every bill on time. Most people can get their first FICO score after about six months of activity, and a good score within one to two years.
Why you have no score
Having no credit is not the same as having bad credit. A FICO score needs at least one account that has been open for six months and has reported activity in the last six months. Until then, lenders simply have nothing to judge you by.
6 steps to build credit
- Get a secured credit card. You put down a refundable deposit, often $200 to $500, which becomes your limit. Choose one with no annual fee that reports to all three bureaus (Equifax, Experian and TransUnion).
- Or become an authorized user. A parent or partner with a long, clean history can add you to their card. Their history on that card can show up on your report.
- Consider a credit-builder loan. A credit union or app holds the loan amount in savings while you make monthly payments, then releases the money to you at the end.
- Pay on time, every time. Payment history is about 35% of a FICO score. Set up autopay for at least the minimum.
- Keep your balance low. Use less than 30% of your limit, and under 10% is better. On a $300 limit, that means keeping the statement balance under $90.
- Add rent and bills. Services such as Experian Boost can add rent, phone and utility payments to your file.
What makes up your score
| Factor | Weight | What to do |
|---|---|---|
| Payment history | 35% | Never miss a due date |
| Amounts owed | 30% | Keep balances under 30% of limits |
| Length of history | 15% | Keep your first card open |
| New credit | 10% | Apply only when you need to |
| Credit mix | 10% | A card plus a loan helps over time |
Mistakes to avoid
- Applying for several cards at once. Each application adds a hard inquiry.
- Carrying a balance on purpose. You do not need to pay interest to build credit; pay the statement in full.
- Closing your first card. It shortens your history.
- Co-signing for someone unless you can afford to pay their debt.
How long does it take?
Expect a first score after about six months. With on-time payments and low balances, many people reach the “good” range of 670 or more in 12 to 24 months. See credit score ranges and how to raise your credit score fast for the next steps.
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Frequently asked questions
Can I build credit without a credit card?
Yes. Credit-builder loans, student loans, car loans and reported rent payments all build history.
Does checking my own credit hurt my score?
No. Checking your own report or score is a soft inquiry and has no effect.
Does a debit card build credit?
No. Debit card use is not reported to the credit bureaus.
This article is general information, not financial or tax advice.
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