Advertiser Disclosure
Improve Credit

What’s the Best First Step to Build My Credit?

Jennifer White
By
A man looks at his phone while holding an apple in his other hand.
Dear Experian,

I have zero credit. Never had a credit card. What's the best first step to build my credit?

- ISB

Dear ISB,

The first step to building a credit history is to get a credit account. You won't have a credit report until you have a credit history, and you won't have a credit history until you have at least one account associated with your name.

When you open a credit account, the lender will likely report that account to the national consumer credit bureaus (Experian, TransUnion and Equifax) at the end of its first billing cycle, usually within a couple of months of you opening it. However, not all lenders report credit accounts to the bureaus, so you might ask the company you are applying with beforehand to be certain.

Once an account is opened in your name, or you're added to an existing account, Experian will create a report for you using the information sent to us by the creditor.

How Can I Get Credit for the First Time?

When you've never had credit before, qualifying for your first account can feel daunting—it's true that it can be hard to get credit when you don't have credit.

If you are having trouble qualifying for an account on your own, there are multiple options available to you:

  • Open a secured credit card account. Secured accounts require you to give the lender a security deposit in exchange for a credit card account. Often, the amount you deposit becomes your credit limit. You may receive a small credit limit even if you can afford to put down a larger deposit. Secured accounts are easier to qualify for because if you fail to pay, the lender can use the money in your deposit account to cover the outstanding debt. If you manage the account well and make all payments on time, you can see an improvement in your credit scores, and the lender may eventually convert the account to a traditional, unsecured credit card.
  • Ask a family member to cosign for you. If you have a close family member with good credit, you might ask them to cosign for a small loan or a credit card for you. Keep in mind that cosigners are equally responsible for the account, so any missed payments or high balances will appear on their credit report as well as yours, potentially damaging scores for both of you.
  • Start as an authorized user. As long as the account doesn't have a history of late payments, and is reported to the credit bureaus, being an authorized user on a friend's or family member's credit card account can help you begin a credit history in your name. Because authorized users are not responsible for making payments, not all lenders report these accounts to the credit reporting agencies, so check with the company before being added.
  • Sign up for Experian Boost®ø. Experian Boost allows you to add your on-time utility, cellphone and Netflix® payments to your credit report. Although anyone can benefit, those with thin files (five or fewer credit accounts) often benefit the most.

Building Your Credit for the Future

Once you've established a positive credit history by opening an account or two and making all your payments on time, it should be easier to qualify for new credit and favorable interest rates going forward. The two most important factors in a good credit score are your payment history and your credit utilization ratio, so remember to keep any credit card balances as low as possible. Ideally, you should pay your revolving account balances in full each month.

The length of your credit history is another contributor to your credit scores, so it may take some time before your credit history is as strong as you would like it to be. In the meantime, you can order your free Experian credit score periodically and pay attention to the risk factors included with your score. These factors let you know which elements in your credit report you can improve on in order to improve your scores.

Thanks for asking.
Jennifer White, Consumer Education Specialist

This question came from a recent Periscope session we hosted.

How Good Is Your Credit Score?

Examples: 600, 700, 780, 803
300 credit score301 credit score302 credit score303 credit score304 credit score305 credit score306 credit score307 credit score308 credit score309 credit score310 credit score311 credit score312 credit score313 credit score314 credit score315 credit score316 credit score317 credit score318 credit score319 credit score320 credit score321 credit score322 credit score323 credit score324 credit score325 credit score326 credit score327 credit score328 credit score329 credit score330 credit score331 credit score332 credit score333 credit score334 credit score335 credit score336 credit score337 credit score338 credit score339 credit score340 credit score341 credit score342 credit score343 credit score344 credit score345 credit score346 credit score347 credit score348 credit score349 credit score350 credit score351 credit score352 credit score353 credit score354 credit score355 credit score356 credit score357 credit score358 credit score359 credit score360 credit score361 credit score362 credit score363 credit score364 credit score365 credit score366 credit score367 credit score368 credit score369 credit score370 credit score371 credit score372 credit score373 credit score374 credit score375 credit score376 credit score377 credit score378 credit score379 credit score380 credit score381 credit score382 credit score383 credit score384 credit score385 credit score386 credit score387 credit score388 credit score389 credit score390 credit score391 credit score392 credit score393 credit score394 credit score395 credit score396 credit score397 credit score398 credit score399 credit score400 credit score401 credit score402 credit score403 credit score404 credit score405 credit score406 credit score407 credit score408 credit score409 credit score410 credit score411 credit score412 credit score413 credit score414 credit score415 credit score416 credit score417 credit score418 credit score419 credit score420 credit score421 credit score422 credit score423 credit score424 credit score425 credit score426 credit score427 credit score428 credit score429 credit score430 credit score431 credit score432 credit score433 credit score434 credit score435 credit score436 credit score437 credit score438 credit score439 credit score440 credit score441 credit score442 credit score443 credit score444 credit score445 credit score446 credit score447 credit score448 credit score449 credit score450 credit score451 credit score452 credit score453 credit score454 credit score455 credit score456 credit score457 credit score458 credit score459 credit score460 credit score461 credit score462 credit score463 credit score464 credit score465 credit score466 credit score467 credit score468 credit score469 credit score470 credit score471 credit score472 credit score473 credit score474 credit score475 credit score476 credit score477 credit score478 credit score479 credit score480 credit score481 credit score482 credit score483 credit score484 credit score485 credit score486 credit score487 credit score488 credit score489 credit score490 credit score491 credit score492 credit score493 credit score494 credit score495 credit score496 credit score497 credit score498 credit score499 credit score500 credit score501 credit score502 credit score503 credit score504 credit score505 credit score506 credit score507 credit score508 credit score509 credit score510 credit score511 credit score512 credit score513 credit score514 credit score515 credit score516 credit score517 credit score518 credit score519 credit score520 credit score521 credit score522 credit score523 credit score524 credit score525 credit score526 credit score527 credit score528 credit score529 credit score530 credit score531 credit score532 credit score533 credit score534 credit score535 credit score536 credit score537 credit score538 credit score539 credit score540 credit score541 credit score542 credit score543 credit score544 credit score545 credit score546 credit score547 credit score548 credit score549 credit score550 credit score551 credit score552 credit score553 credit score554 credit score555 credit score556 credit score557 credit score558 credit score559 credit score560 credit score561 credit score562 credit score563 credit score564 credit score565 credit score566 credit score567 credit score568 credit score569 credit score570 credit score571 credit score572 credit score573 credit score574 credit score575 credit score576 credit score577 credit score578 credit score579 credit score
Resources
Latest Research
Latest Reviews