Having no credit history can be as frustrating as having bad credit, because lenders have nothing to evaluate. The good news is that you can start building a record with a few simple tools.
Secured Credit Cards
You put down a refundable deposit that usually becomes your credit limit. Use the card for small purchases, pay the balance in full, and the issuer reports your activity to the bureaus. Many issuers let you upgrade to an unsecured card after a period of good behavior.
Credit-Builder Loans
Offered by some credit unions and community lenders, these loans hold the borrowed amount in a savings account while you make payments. When you finish, you receive the funds, and your on-time payments have been reported.
Authorized User Status
A trusted family member can add you to their credit card account. Make sure the account is in good standing and that the issuer reports authorized users.
Reporting Rent and Utilities
Some services report rent, utility or phone payments to credit bureaus. Check that the service is reputable and reports to the bureaus that matter to you.
Good Habits From Day One
- Pay on time without exception
- Keep balances low
- Do not apply for many products at once
With six months of activity, you can typically generate a score. Over a year or two of steady use, your profile can become strong.