Updated October 2026. General information for US readers, not personalized financial, tax, insurance or legal advice.
Without a credit history, lenders can’t see how you handle debt. That makes it harder and more expensive to get a credit card, rent an apartment or finance a car. The good news is you can build credit from zero, and the steps are simple.
Key takeaways
- Start with a secured credit card or a credit-builder loan.
- Use a small part of your limit and pay the full balance every month.
- Payment history is 35% of a FICO score, so every on-time payment counts.
- Don’t apply for several cards at once.
Why Your First Account Matters
FICO generally needs at least one account that has been open for about six months, with recent activity reported, before it can give you a score. The two biggest factors in that score are payment history (35%) and amounts owed (30%) (myFICO).
So your first goal is simple: open one account, use it lightly, and pay on time every month.
6 Ways to Build Credit From Scratch
| Option | How it works | Best for |
|---|---|---|
| Secured credit card | You pay a refundable deposit, often equal to your credit limit, and use it like a normal card | Most people starting out |
| Credit-builder loan | The lender holds the loan in a savings account while you make payments, then releases it | People who don’t want a card |
| Authorized user | A family member adds you to their credit card | Students and young adults with family help |
| Student credit card | An unsecured card made for college students | Students with their own income |
| Rent and utility reporting | On-time rent or bill payments get reported to credit bureaus | Renters who already pay on time |
| Co-signed card or loan | Someone with good credit signs with you and shares responsibility | Only when both people understand the risk |
1. Secured credit card
This is the most common first step. Look for a card that reports to all three bureaus (Equifax, Experian and TransUnion), has no annual fee or a low one, and lets you upgrade to a regular card and get your deposit back after some months of on-time payments.
Put one small recurring bill on it, like a phone or streaming subscription, and set up autopay for the full statement balance.
2. Credit-builder loan
Many credit unions and community banks offer these. You don’t get the money up front. Instead, the lender keeps it in a locked savings account while you make monthly payments, and those payments are reported to the bureaus. When you finish, you get the money back, minus any interest and fees. It builds credit and savings at the same time.
3. Become an authorized user
A parent or family member with good credit can add you to their card. Their history on that account may appear on your credit report. Make sure the issuer reports authorized users, and choose someone who pays on time and keeps a low balance, because their late payments can affect you too.
4. Student credit card
Student cards are easier to get than most regular cards. Under federal law, applicants under 21 need to show independent income or have a co-signer, so have proof of a job or other income ready.
5. Rent and utility reporting
Some landlords report rent payments, and some services will report your rent or utility payments for a fee. Not every lender or scoring model uses this data, so check the cost before you sign up.
6. Co-signed card or loan
A co-signer is fully responsible for the debt if you don’t pay, and late payments hurt both of you. Use this only with someone you trust and talk openly about the risk.
Habits That Build a Strong Score
- Pay on time, every time. Autopay prevents accidental late payments.
- Keep your balance small compared with your limit, especially on a card with a low limit.
- Pay the full statement balance. You don’t need to carry a balance or pay interest to build credit.
- Space out applications. Each one usually means a hard inquiry.
- Check your reports. You can get them free every week at AnnualCreditReport.com (NH Banking Department).
Mistakes to Avoid
- Maxing out a low-limit secured card, which pushes your utilization up.
- Applying for several cards after one gets declined.
- Paying for services that promise an “instant” credit score.
- Closing your first card after you upgrade, which shortens your history.
Frequently Asked Questions
How long does it take to build credit from nothing?
Usually around six months of activity on at least one account before you get a FICO score. Building a strong score takes longer and depends on steady, on-time payments.
Does using a debit card build credit?
No. Debit card purchases come out of your bank account and aren’t reported to the credit bureaus.
Can I build credit without a credit card?
Yes. A credit-builder loan, a small installment loan or rent reporting can all add positive history to your credit report.
Related Guides
Sources: myFICO: What’s in your credit score; New Hampshire Banking Department: free weekly credit reports.