Building Credit from Scratch: A Step-by-Step Guide

Building credit when you have none can feel like a catch-22: you need credit to get credit. But there are several effective strategies to establish your credit history from scratch.

A secured credit card is often the easiest first step. You provide a deposit that becomes your credit limit. Use it for small purchases and pay the full balance monthly.

Become an authorized user on a family member's credit card. Their positive payment history can help build your credit, though you'll want to ensure they have good credit habits.

Credit-builder loans are designed specifically for building credit. The loan amount is held in a savings account while you make payments. After paying it off, you get the money plus you've built credit history.

Some landlords and utility companies report to credit bureaus. If yours don't, services like Experian Boost can add these payments to your credit report.

Start with one credit account and use it responsibly for 6-12 months before applying for additional credit. Each new application causes a hard inquiry that temporarily lowers your score.

Keep your credit utilization low—ideally under 10% while building credit. If your secured card has a $200 limit, keep your balance under $20.

Be patient. Building excellent credit takes time. Consistent, responsible credit use over years will establish a strong credit foundation.