If you’re new to borrowing in the United States, you might wonder how to start building your credit history. After all, a strong credit score helps you qualify for better personal loans, credit cards, and even rental agreements. Fortunately, building credit from scratch is not as hard as it sounds — but you must be intentional. So, let’s explore how to build credit step by step.
1. Start with a Secured Credit Card
First and foremost, if you have no credit history, applying for a secured credit card is a smart move. Since this type of card requires a deposit, lenders feel safer offering it to new borrowers. As long as you pay your bills on time, it helps build your credit quickly.
Example: A $300 secured deposit can give you a $300 credit limit — and it reports to all three credit bureaus.
👉 Check this helpful external guide: NerdWallet – Best Secured Credit Cards
2. Always Pay on Time
Next, payment history makes up 35% of your credit score. Therefore, paying your credit card or loan on time every month is essential. Even one late payment can hurt your score significantly.
To avoid missing due dates, consider setting automatic payments or calendar reminders.
3. Keep Credit Utilization Low
In addition to paying on time, how much you borrow also matters. Try to use less than 30% of your available credit. For instance, if your limit is $500, try not to carry a balance of more than $150.
That way, you show lenders you can borrow responsibly.
4. Consider a Credit Builder Loan
Alternatively, you could apply for a credit builder loan, which is designed for people with no credit history. The money you “borrow” is held in a savings account, and you make fixed monthly payments. Afterward, the money is released to you.
Not only does it help you save, but it also reports positive activity to credit bureaus.
🔗 Read more here: What Is a Credit Builder Loan? – Experian
5. Become an Authorized User
Another simple strategy is becoming an authorized user on someone else’s credit card. For example, if a family member has good credit, they can add you. As a result, their good credit history shows up on your report — instantly boosting your score.
However, make sure they have a clean payment record and low credit usage.
6. Use Credit Responsibly Every Month
Although it may be tempting to make large purchases, staying within your means is key. Using credit for small monthly expenses — like gas or groceries — and paying it off completely is a great habit.
Over time, your score will reflect responsible borrowing behavior.
7. Regularly Monitor Your Credit Report
Finally, you should check your credit report at least once a year. That way, you can catch any errors or fraud early. In the US, you can get a free credit report every year from each of the three bureaus at:
✅ Download Our Free Credit Building Starter Guide
Want an easy-to-follow plan?
👉 Download our “Credit Building Starter Checklist” (PDF) and take your first step toward great credit today.
Final Thoughts
In conclusion, building credit doesn’t happen overnight — but with discipline and the right steps, it’s absolutely doable. Whether you’re applying for a personal loan, getting a new credit card, or just planning ahead, your credit matters.
Don’t forget to read more on our blog:
🔗 How to Apply for a Personal Loan as a New Borrower
🔗 Best Loans for No Credit History in the US
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