How To Build Your Credit

Wondering how to build your credit from scratch? It might seem tricky. How can you build your credit if you have no credit cards or loans? And how can you get a loan or credit card if you have no credit history?
 
Don’t worry. There are several ways to begin building your credit. It’s important to understand the 5 Cs of Credit, the main factors that lenders and creditors consider to gauge a borrower’s creditworthiness. The best place to start is establishing a credit history.

How to Build Credit with a Credit Card

Get a secured credit builder card

Credit cards that are designed to build (or rebuild) your credit are called secured credit cards.
 
When you apply for a secured card, you make a cash deposit to secure the credit line. The amount of your deposit is the amount of your credit limit. For example, a $1,000 deposit tied to a secured credit card means you can spend up to $1,000 on that card.
 
Once you have the card, you use it just like any other credit card: you buy things and make your monthly payments. As you make on-time payments, your credit card issuer will report that to the credit bureaus, so you’ll begin to build credit.
 
Make sure you understand the ins and outs of credit cards before opening an account.
 

Get a student credit card

College students can apply for a student credit card, which is an entry-level card that helps students build their credit. They tend to have lower credit limits than standard credit cards. On the upside, many don’t charge an annual fee.
 
Typically, you don’t need to have a credit history to apply for a student credit card. You simply need to be at least 18 years old and attend college or an eligible trade school. Some cards require that you be a US citizen, while others are open to international students.
 
As with all credit cards, it’s important to pay your monthly bill on time. As you do, you’ll begin building a credit history. When you graduate, many student cards can be converted to a non-student version.

How to Build Credit Without a Credit Card

Take out a secured loan

A secured loan is backed up by collateral, reducing the lender’s risk. An auto loan is a secured loan, because if you stop making payments, the lender can take possession of your car. A mortgage loan is also a secured loan, with your home as collateral.
 
If you’re trying to build credit, you can get a savings secured loan, which is backed by the money you already have deposited in savings.
 
A credit-builder loan is a type of secured loan designed especially for people who have no credit or little credit. These loans are usually for a small amount and may not require a credit check.
 
Here’s how it works: The money (loan) is held by the bank or credit union in a locked account. You make monthly payments. Once you’ve paid the loan off, the lender releases the money to you. In the meantime, you’ve built your credit history by making on-time payments.
 

Get a loan with a cosigner

Consider applying for a loan with a cosigner (co-borrower) who has good credit. This may help you get a loan that you wouldn’t be eligible to get by yourself.
 
Make sure that you and your cosigner understand the risks and responsibilities that come with this type of loan. The cosigner is equally responsible for payments. So if you default on your payments, your cosigner will need to make them.
 

Become an authorized user

Another way to build credit is to become an authorized user on someone else’s credit card. This might be a parent’s credit card, for example, or a spouse’s card.
 
When you become an authorized user, you’ll share an account with the primary cardholder but will get a card with your own name printed on it. While you can use the card to shop or pay for services, the primary card holder is responsible for making monthly payments. If payments are made on time, being an authorized user will help build your credit.
 

Explore rent and utility reporting services

Consumers typically have not gotten credit for paying for rent or utilities on time. But that’s beginning to change.
 
When you register for rent-reporting services¹ such as Boom, Piñata, or Self, your on-time rent payments get reported to all three credit bureaus, which can give your credit score a nice hike.
 
Experian Boost does the same for free. Their service adds your rent payments only to your Experian credit report (not to Equifax or TransUnion). But Experian Boost also gets you credit for on-time payments of your cell phone, streaming services, and utility bills. You can even get credit for past payments.
 
Credit Spark is similar to Experian Boost but reports your rent, utility, and phone bills to TransUnion.

Build a good credit history

Your credit history is basically an overview of how you’ve managed credit in the past. Lenders use it to help predict how you’ll handle any new debt or credit they might offer you.
 
To build your credit score, it’s important to pay your bills on time, every time. Also, make sure that your credit report is error-free (some mistakes can hurt your score) and add any loans or credit accounts that might improve your history.
 
Ready to get started? Get more tips on how to improve your credit.

What’s the average credit score?

The average FICO score in the US was 713 in 2025, falling into the “good” range.
 
FICO scores, the most commonly used credit score, range from 300 (poor) to 850 (exceptional).

Patelco Can Help You Build Your Credit

If you’d like to improve your credit, Patelco is here to help.
 
We can provide guidance and offer a range of products to help you establish or build your credit history. Ask about secured credit cards (like the Patelco Pure Secured Mastercard® Credit Card), student credit cards, and our ScoreUp® Credit Builder Loan.