How to Build Credit When You Don’t Have Any

Roughly 26 million American adults are considered “credit invisible,” meaning they have no credit history whatsoever. It’s one of those vicious circles: you don’t have credit, so no one will give you credit, thereby making it even more difficult to build credit. The credit invisible tend to be from low-income areas, and credit invisibility can make it difficult to even open a checking account, let alone build any credit.

Many of us may also remember having a difficult time obtaining credit when we first turned 18, and unless we had a parent to close friend to help us out, we might still have no credit to speak of today. While the situation might seem hopeless, it isn’t. There are still actions you can take to get back on the right track and begin building a stellar credit profile.

how to build credit

Apply for a secure credit card

Secure credit cards are typically easier to obtain, because you pay for it upfront. They usually come in smaller denominations (under $1,000) and there’s no risk for the lending institution or for the applicant. However, for most secure credit cards, you must have a checking or savings account.

Find a cosigner

If you have a close relative or friend with good or excellent credit, consider asking them to cosign on a small loan for you. You could even offer to put up the cash before they co sign as a goodwill gesture, reassuring them that you can pay the loan back. Just remember, defaulting on a cosigned loan will also have a negative impact on your cosigner, and may cause irreparable damage to your personal relationship with them.

Try applying for a retail card

 Some gas stations and smaller retail chains offer in-store credit cards, and it’s sometimes easier to obtain these than a major credit card, such as a Visa or Mastercard. Check around at different stores you frequent and ask them about their qualifications.

Make all payments on time

It doesn’t matter if it’s a utility account, rent, or even paying a friend back for dinner. Always make payments on time. In fact, that’s probably the number one rule of any financial situation. Making late payments may help you build credit, but in the wrong direction. You don’t want your entire credit history to be defined by the time you forgot to pay your library fines. Making all payments on time not only helps build your financial profile, but can also help build good financial habits that you’ll carry with you for the rest of your life. Also, in some cases, having a good payment history can help you open a checking account.

building credit

While it may seem like an insurmountable challenge to begin the process of building credit, it isn’t. There’s a path to good credit for any American citizen, and it may take a while and a lot of hard work, but in the end, it’s always worth it. Having a good credit score opens up a world of possibilities and helps set you up for financial success. To learn more about how to build or repair credit, a credit repair service could be invaluable. has helped many people on the road to financial stability, and we can help you too.

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Article Updated January 15, 2019

Posted in Credit Report
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