By Ben Luthi6 Accounts That Help Build Credit and 6 That Don’t
By Ben Luthi
Quick Answer
You can build your credit with credit cards, installment loans, lines of credit, credit-builder loans and authorized-user accounts. However, you won't be able to use a payday loan, cash advance app, checking account, prepaid debit card or utilities to establish a positive credit history.
Building a strong credit history can open financial doors, from qualifying for a mortgage to getting a lower rate on an auto loan. But not every account you use counts toward your credit score.
You can build your credit with credit cards, installment loans, lines of credit, credit-builder loans, authorized-user accounts and auto leases. However, everyday financial tools like checking accounts and prepaid debit cards won't move the needle. Here's what you need to know.
6 Accounts That Can Help You Build Credit
In general, most types of debt can be used to build credit, but here's a quick breakdown of specific types of accounts that can help you achieve your goal.
1. Credit Cards
A credit card is one of the most effective tools for building credit. Most credit cards—both secured and unsecured—report your balance and payment activity to all three major credit bureaus each month: Experian, TransUnion and Equifax. Some cards may only report to one or two bureaus, so it's worth confirming with the card issuer before you apply.
To build credit with a credit card, use it regularly and pay your bill on time every month. Keeping your credit utilization rate—the percentage of your available credit limit you're using—low is also important. Finally, paying your balance in full each month allows you to avoid interest charges entirely.
Learn more: An Essential Guide to Your First Credit Card
2. Installment Loans
An installment loan provides a lump sum of money that you repay in fixed monthly payments over a set term. These loans are reported to the credit bureaus, and consistent on-time payments can build your credit history over time.
Common types of installment loans that can help you build credit include:
If you're considering an installment loan, borrow only what you need and make every payment on time to get the most credit-building benefit.
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Est. APR8.99 - 35.99%
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Est. APR7.95 - 29.99%
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Est. APR13.37 - 35.99%
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Est. APR7.99 - 35.99%
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Est. APR7.99 - 35.99%
Loan amount$2,000 - $30,000
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Loan amount$15,000 - $50,000
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Est. APR9.95 - 35.95%
Loan amount$2,000 - $35,000
Est. monthly payment$92 - $1,264
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Est. APR8.39 - 28.70%
Loan amount$20,000 - $250,000
Est. monthly payment$409 - $6,352
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Loan amount$5,000 - $50,000
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Term24 - 60 mo
Est. APR9.99 - 35.99%
Loan amount$1,000 - $35,000
Est. monthly payment$32 - $1,264
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Est. APR11.69 - 35.99%
Loan amount$1,000 - $50,000
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Term36 - 60 mo
View all of our Best Personal Loans for 2026 to see what you’re likely to qualify for, and the rates and terms you might get.
3. Lines of Credit
A line of credit is a form of revolving credit, similar to a credit card. During the draw period, you can borrow up to your credit limit, repay the balance and borrow again as needed. Once the repayment period begins, you pay down the remaining balance in fixed installments.
Whether you have a personal line of credit or a home equity line of credit (HELOC), keeping the account in good standing and making on-time payments can help build your credit.
4. Credit-Builder Loans
A credit-builder loan is designed specifically for people who are new to credit or are rebuilding after financial setbacks. Instead of receiving loan funds upfront, the lender sets the money aside in a savings account or certificate of deposit. You make monthly payments for a fixed term, and the lender disburses the funds to you once you've finished paying.
Most credit-builder loans are available through credit unions, community banks and online lenders. Make sure the lender reports your payments to all three credit bureaus, and make all your payments on time for the most benefit
Learn more: Ways to Build Credit if You Have No Credit History
5. Authorized-User Accounts
If you can't get approved for a credit card on your own, becoming an authorized user on someone else's account is a way to build credit without taking on debt. Once the primary cardholder adds you, the account's history is added to your credit report.
If the primary cardholder has used the account responsibly—maintaining a low credit utilization rate and making consistent on-time payments—it can strengthen your credit profile. You can also use the card for purchases, though you won't be legally responsible for paying the bill.
6. Auto Leases
Leasing a car can build credit in much the same way as taking out an auto loan. A vehicle lease is treated as an installment loan and is typically reported to the credit bureaus. As long as your leasing company reports to all three bureaus and you make your payments on time, the account can help establish positive credit history.
Positive payment history from a car lease can remain on your credit reports for up to 10 years after the lease ends. Missing a payment, however, can be just as damaging as a missed loan payment.
Learn more: Does Leasing a Car Build Credit?
6 Accounts That Don't Help Build Credit
While some of these accounts may have other uses, you typically can't use them to establish and maintain a good credit history.
1. Payday Loans
Payday loans are among the most expensive forms of credit, with loans commonly charging an annual percentage rate (APR) of 400% or higher.
Despite the high cost, payday lenders typically don't report to the credit bureaus, so these loans don't help you build credit. If you fall behind, though, the debt may be sent to collections, which can appear on your credit report and damage your score. If you need a small-dollar loan, consider payday loan alternatives such as a personal loan for bad credit.
2. Cash Advance Apps
Cash advance apps let you access a small portion of your next paycheck early, often with low fees or optional tips. They can be a lower-cost alternative to payday loans in a pinch, but these apps typically don't report your payments to the credit bureaus. Using them responsibly is fine for cash flow, but it won't help you build credit.
3. Most Checking Accounts
Your checking account is essential for day-to-day money management, but regular transactions—including debit card purchases, bill payments and direct deposits—don't appear on your credit report. Deposit accounts in general won't help you build credit, including:
- Savings accounts
- Checking accounts
- Money market accounts
- Certificates of deposit
- High-yield savings accounts
Certain checking accounts may help pave the way to building credit, however. The Experian Smart Money™ Digital Checking Account & Debit Card can help you build credit without debt by linking to Experian Boost®ø, which gives you credit for eligible bill payments after three months of payments. See terms at experian.com/legal.
4. Prepaid Debit Cards
A prepaid debit card lets you spend only what you load onto the card. There's no credit line and no debt involved, so there's nothing for lenders to report.
Prepaid cards can be a useful budgeting tool, but they won't help you build credit. If you're looking for something similar that does build credit, a secured credit card may be a better fit.
5. Utility Accounts in Some Cases
Utility providers may run a soft credit check when you open an account, but that won't affect your score. In most cases, your on-time utility, cellphone and similar payments aren't reported to the credit bureaus, so paying those bills won't automatically build credit.
That said, you can still get credit for utility payments, even if your providers don't report them. Experian Boost is a valuable feature that allows you to add eligible utility, rent, phone, insurance and streaming subscription payments to your Experian credit report. You can sign up and link the accounts you use to pay bills, and qualifying on-time payments can be added to your Experian credit file, potentially raising your FICO® ScoreΘ powered by Experian data instantly.
6. Buy Now, Pay Later Loans in Some Cases
Buy now, pay later (BNPL) services let you split purchases into short-term installments, often with no interest charges or fees. Most BNPL plans don't report on-time payments to the credit bureaus, so they typically won't help you build credit.
But reporting policies vary by provider and are changing fast. Here are just a few examples:
- Affirm: In 2025, for instance, Affirm began reporting all BNPL transactions to Experian and TransUnion. However, the company noted that the data won't impact your credit score, and there's no indication of when that will change.
- Klarna: Klarna began reporting loan activity for its long-term loans to TransUnion, but not its pay-in-4 plans. What's more, the data is only visible to you and doesn't help your credit score.
- Afterpay: Afterpay has stated that it won't report any BNPL payments to the credit bureaus until it sees proof that on-time BNPL payments will help borrowers' credit scores.
Regardless of the provider, missed payments can still end up in collections, which will hurt your score.
How Long Does It Take to Build Credit?
Building credit takes time. To generate a FICO® Score, you generally need at least one credit account that has been open for six months or more, with activity reported to the bureaus. With VantageScore®, you can get a credit score as soon as your first account is reported to the credit bureaus. In both cases, adding more accounts over time helps round out your credit profile.
That said, establishing a solid credit history typically takes several years. Be cautious of any service promising to build your credit quickly: These are often scams. To get started on the right foot, consider signing up for Experian Go™, which provides tools and guidance to help you build credit from scratch, and gives you free access to your Experian credit report and FICO® Score once you start building credit.
Frequently Asked Questions
The Bottom Line
Building credit is a long game, but knowing which accounts count is the first step. Focus on accounts that report to the credit bureaus, make every payment on time and keep your balances manageable.
While you're working on your credit, consider using Experian's free credit monitoring service to track your progress. You'll get access to your Experian credit report and FICO® Score, along with real-time alerts when changes are made to your credit file and insights into how you can improve your score.
Instantly raise your FICO® Score for free
Use Experian Boost® to get credit for the bills you already pay like utilities, mobile phone, video streaming services and now rent.
No credit card required
About the author
Ben Luthi
Ben Luthi has worked in financial planning, banking and auto finance, and writes about all aspects of money. His work has appeared in Time, Success, USA Today, Credit Karma, NerdWallet, Wirecutter and more.
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