No credit score? You’re not alone—millions of Americans have what’s known as “invisible” credit. That means no credit cards, no loans, and no history for lenders to evaluate. Without that track record, it can be hard to get approved for a car loan, apartment, or even a cell phone plan.
The good news is that building credit from scratch doesn’t take long when you use the right tools and habits. From secured cards to rent reporting, there are easy ways to start building a strong credit profile—even if you’ve never borrowed money before.
Here’s how to get started.
5 Ways to Build Credit from Scratch
To build credit history, you have to use credit. The catch-22, though, is that most lenders and credit card companies don’t want to extend an offer to someone with no credit history.
This is because there is no indication of how able and willing you are to repay what you owe. Luckily, there are a few different products you can use to overcome this issue while taking baby steps into the world of credit.
1. Credit Cards for Beginners
Opening your first credit card gives you the chance to show that you can use credit responsibly. Here are three beginner-friendly options to consider based on your situation and goals.
Secured Credit Cards
Secured cards are designed for people with no credit history. You’ll put down a refundable security deposit—usually $200 to $500—which becomes your credit limit. From there, you use the card just like any other: make small purchases, pay the balance on time, and build positive payment history.
Look for a secured card with no annual fee and one that reports to all three credit bureaus. If you use it responsibly, you may qualify for an unsecured card within 6 to 12 months.
See also: How to Build Credit With a Secured Credit Card
Student Credit Cards
Student credit cards are built for college students who want to start building credit early. These cards usually have lower credit limits and higher interest rates, but they may offer perks like cashback or sign-up bonuses.
You’ll likely need to show proof of income or have a cosigner to get approved. Used responsibly, a student credit card can give you a solid head start on your credit history.
Store Credit Cards
Store cards are typically easier to get than traditional credit cards, even with no credit history. They can only be used at a specific retailer, but you may earn discounts, rewards, or promotional offers.
Just keep in mind that store cards often come with high interest rates and low credit limits. They’re best used for occasional purchases you can pay off in full each month.
See also: 8 Ways to Build Credit Without a Credit Card
2. Credit Builder Loans
A credit builder loan is a simple way to start building credit when you don’t have any. You make fixed monthly payments, but instead of receiving the money upfront, the funds are held in a savings or CD account until the loan is paid off.
As you make on-time payments, the lender reports them to the credit bureaus, which helps you build a positive payment history. Once the loan term ends, you get access to the money—plus a little interest.
Self is one of the most popular options, offering loan amounts from $550 to $2,200 with terms as short as one year. It’s a low-risk way to build credit while also saving money. Check out our review of Self to see if it’s the right fit for you.
3. Become an Authorized User
Piggybacking on someone else’s good credit is one of the easiest ways to start building your own. If a family member or close friend has strong credit, ask if they’re willing to add you as an authorized user on their credit card.
You don’t need to use the card—or even have it in hand—for the account to show up on your credit report. As long as the primary cardholder makes on-time payments, their positive history can help boost your score.
To make the request easier, let them know you don’t need access to the card itself. Just be sure they have a solid payment track record, because if they miss payments, it could hurt your score too.
4. Cosigner Loans and Credit Cards
Whether you’re looking for a loan or a credit card to build credit, you can use a cosigner to increase your chances of access to credit. In fact, if you’re a student and don’t have any income, you might be required to find someone over the age of 21 to serve as your cosigner. But don’t make this decision lightly.
Cosigners are legally obligated to pay your debt if you default. Not only that, your actions affect their credit. For example, just as late payments hurt your credit score, they hurt your cosigner’s score just as much.
It can also be challenging to remove a cosigner once they are on your credit card or loan. For example, you may have to do a balance transfer or pay it in full to remove a cosigner from a credit card account. You may even have to refinance to remove them from a loan.
5. Rent Reporting Services
If you’re already paying rent each month, rent reporting is a smart way to turn that into credit-building power. Services like Rental Kharma and RentReporters can report your rent payments to one or more of the major credit bureaus, helping you build credit without taking on new debt.
Rent reporting services work by verifying your rent history through your landlord or property manager. Once verified, your past and ongoing rent payments can start showing up on your credit report—often giving your score a helpful boost.
Expect to pay an initial setup fee between $50 and $100, plus a monthly service fee of around $10 to $15. While it’s an added expense, it can be worth it if you don’t have other credit-building tools in place. Just make sure the service you choose reports to at least one or two of the major credit bureaus, so it actually impacts your credit score.
5 Habits to Help You Build Credit from Scratch
It takes more than getting a credit card or loan to build your credit scores. You also have to steward those accounts responsibly. A few routine habits will help keep your credit healthy, ensuring that your credit history is a positive one.
These steps strengthen your credit score and demonstrate that you are trustworthy with creditors’ money. That way, you’ll be able to borrow money if you need it, and at better rates.
1. Pay Your Bills On Time
Your payment history accounts for 35% of your credit score. This is the most heavily weighted category there is. So, it’s crucial to make timely payments every month to build credit.
This doesn’t just apply to credit cards: student loans, cell phone bills, and utility bills all report late and delinquent payments if you fail to pay. Making full, on-time payments is the fastest way to build credit. But, of course, making late payments or missing payments is the quickest way to trash it.
2. Carry Small Credit Card Balances (or none at all!)
When you get a credit card to build your credit history, the ideal scenario is to charge a small amount each month, then pay off your balance by the due date. Having a credit card isn’t a license to spend frivolously. Instead, it’s giving you the chance to prove yourself as a creditworthy individual.
If you do need to carry a balance for some reason, try to keep it under 30% of your credit limit. So, if you’re allowed to charge up to $1,000, you wouldn’t want to have a balance of more than $300 at any given time.
The lower balance, the better because you don’t want to spend outside your means and accrue outrageous interest that you’ll have to pay back over time.
3. Limit Your Number of New Accounts
You may qualify for any number of the credit products we discussed above. However, it’s wise not to overextend yourself by opening up every account you’re approved for. Account age is a factor in determining your credit score. So, new accounts bring down the average age of your overall credit accounts.
Not only that, your credit score is temporarily dinged a few points for every hard inquiry on your report. And hard inquiries are necessary to get approved for a loan or credit card. Plus, from a lender’s perspective, lots of open accounts might indicate that you’re desperate for credit and might not have steady finances.
4. Don’t Overuse Your Credit Cards
When you have a strategic number of credit cards, be sure not to max them out. Again, this makes you look like you’re reliant on credit just to get by.
Your amount owed also accounts for 30% of your FICO score—the second-largest category after payment history. The amount you owe compared to the amount of credit you have access to is your credit utilization ratio.
5. Lower Your Credit Utilization Ratio
Your credit utilization ratio is the amount of credit you’re using compared to your total limit. A high ratio—especially anything over 30%—can drag down your credit score and signal to lenders that you might be overextended.
Keep your balances low and pay them off as soon as possible. This shows you’re in control of your spending and makes you look like a safer borrower.
See also: How to Start Building Credit at Age 18
Final Thoughts
Building credit from scratch doesn’t require a big income or a long timeline. With the right mix of starter tools and consistent habits, you can create a strong credit profile that opens doors.
Start small, make every payment count, and keep your balances low. Your future self will thank you when it’s time to finance a car, buy a home, or qualify for the best credit card offers.
Frequently Asked Questions
What is the best way to start building credit from scratch?
The best way to start building your credit is to become an authorized user on someone else’s credit card. However, many people don’t have that option.
In that case, opening a secured credit card, or taking out a credit builder loan are the best options, as long as you make on-time payments.
How long does it take to build credit from scratch?
It typically takes six months to a year to establish credit history. However, this time frame can vary depending on the steps you take to build credit and the amount of credit you have.
What is the difference between a secured credit card and a regular credit card?
A secured card requires a security deposit that is used as collateral, while an unsecured card does not require any security deposit. Secured credit cards can help build credit as long as you make on-time payments.
What should I do if I have a low credit score?
If you have a low credit score, it’s important to first check your credit report for any errors that may be dragging down your score. It’s also essential to make all of your payments on time and to keep balances low to help improve your credit score.
