So, you’re staring at your credit score (or lack thereof) and wondering, “How do I even get started?”
First of all, take a deep breath. You’re further ahead than you think. Everyone starts somewhere, and while it’s true that you often need credit to build credit, the good news is that it’s absolutely possible to start from scratch.
At WithU Loans, we believe in meeting you where you are and walking with you every step of the way. Whether you're just beginning to explore your financial options or looking to lay a stronger foundation, we’re here to help you build credit with confidence.
Let’s walk through how to get started, what tools to use, and how to avoid common pitfalls.
Why Credit Matters
Before we dive into the “how,” let’s talk about the “why.” A good credit score is a key that unlocks financial opportunities, while a low or nonexistent score can mean higher costs or missed chances altogether.
A good credit score can help you:
- Qualify for loans and credit cards with better interest rates
- Rent an apartment more easily
- Get approved for a phone plan
- Even land certain jobs
Without a credit history, lenders don’t have a way to assess your financial reliability. That’s why it’s important to start building credit early, even if you’re not planning to borrow money right away. Establishing a solid foundation now can make life easier down the road.
Ready to take that first step? Here are some proven strategies to help you get started building credit.
1. Open a Secured Credit Card
A secured credit card is one of the easiest ways to begin building credit. It works like a regular credit card but requires a refundable security deposit that acts as your credit limit. For example, if you pay a $300 deposit, your credit limit will be $300. You’ll just need to make sure you have the cash up front to cover the deposit.
Why it helps:
Secured credit cards are easier to qualify for than regular credit cards. Your payment activity is reported to the major credit bureaus (Equifax, Experian, and TransUnion), helping you establish a credit history.
Pro tip:
Choose a secured card with no annual fee and make small purchases you can pay off in full each month.
2. Become an Authorized User
If you have a trusted family member or friend with good credit, ask if they’ll add you as an authorized user on their credit card. You’ll get a card in your name, but the account remains under their control. You don’t need a credit check to open a credit card if you’re an authorized user, since the account belongs to someone else. However, know that the primary user is still legally responsible for your charges as an authorized user.
Why it helps:
Their positive payment history can be added to your credit report, giving your score a boost. Plus, you don’t need to worry about qualifying for a card on your own.
Pro tip: Make sure the card issuer reports authorized users to the credit bureaus. Not all do!
3. Apply for a Credit-Builder Loan
Credit-builder loans are designed specifically for people like you—people who need help establishing credit. Instead of you receiving money upfront like a traditional loan, the lender holds the money in a savings account while you make monthly payments. Once the loan is paid off, you get the funds and the credit history.
Why it helps:
Not only are your payments reported to the credit bureaus, but you also end up with savings at the end.
Pro tip:
Check with local credit unions or online lenders. Many offer small-dollar credit-builder loans with flexible terms.
4. Pay Bills on Time
Did you know that your payment history is the single biggest factor in your credit score? This means that by paying at least the minimum due each month, you prove to lenders that you’re financially responsible. Some services even allow you to report payments like rent, phone, and utilities to the credit bureaus, adding positive data to your file.
Why it helps:
If you’re already paying bills on time, why not get credit for it? If you aren’t, now is the time to start!
Pro tip:
Services like Experian Boost and other rent-reporting platforms can link your bank account and report qualifying payments.
5. Keep Credit Utilization Low
Your credit utilization rate is the percentage of credit you’re using, how much you owe, out of your total available credit. It’s generally recommended to keep credit utilization below 30% in order to keep a healthy credit score. The lower, the better! Keeping your balances low shows lenders you’re managing credit wisely.
Why it helps:
Maintaining a lower credit utilization ratio shows lenders you’re responsible and that you’re not relying too much on credit to get by.
Pro tip:
Aim to use less than 30% of your credit limit by keeping balances low and avoiding maxing out any one single card.
6. Always Pay on Time and in Full
Once you have a credit account, the real work begins. Building credit is all about managing your accounts wisely, and your payment history makes up 35% of your FICO score, so it’s essential that you make payments on time. Set up autopay or set reminders if you need to. Even one late payment can hurt your credit score.
A common misconception is that carrying a balance on your credit card helps your credit score—it doesn’t. The reality is that paying in full is always the best move to boost your credit score and reduce any interest charges.
Why it helps:
Any balance you carry over month to month will accrue interest, so paying in full helps you avoid extra charges.
Pro tip:
A good rule of thumb is to treat your credit card like a debit card and don’t purchase anything that you don’t have the funds for in your bank account.
7. Monitor your Credit Report
Once you’ve started building credit, remember to review your credit report at least once a year for errors or fraud. Checking your own credit report will not affect your score.
Why it helps:
Keeping an eye on your credit score can help alert you to potential problems early on and help you understand what lenders see when you apply for credit.
Pro tip:
You can get a free report annually at AnnualCreditReport.com.
How Long Does It Take?
You won’t see a credit score overnight, but progress can happen faster than you think. Most people see their first score within 3–6 months of opening a credit account that’s reported to the major credit bureaus.
Just keep in mind: your credit score is dynamic. It can go up or down based on your financial habits. That’s why consistency is key. Paying on time, keeping balance low, and monitoring your credit report all help you stay on track.
Turning Knowledge into Action
Building credit from scratch might feel intimidating, but it’s really about forming smart habits and using the right tools. Remember: credit is a marathon, not a sprint. Start small, stay consistent, and give yourself grace along the way.
At WithU Loans, we believe that financial empowerment starts with education. If you’re ready to take the next step, we’re here to help you explore secured cards, credit-builder loans, and other products designed to help you grow your credit with confidence.
