How to Build Credit from Scratch: A Complete Guide

Building credit from scratch can feel overwhelming, but with the right strategy, you can establish a strong credit profile in 6-12 months.

Step 1: Get a Secured Credit Card

Secured credit cards are designed for people with no credit or bad credit. You make a refundable security deposit (typically $200-$500) which becomes your credit limit. Use it for small purchases and pay in full every month.

Step 2: Become an Authorized User

Ask a parent, spouse, or trusted friend with excellent credit to add you as an authorized user on their oldest credit card with the lowest utilization. Their positive payment history will be added to your credit report.

Step 3: Consider a Credit-Builder Loan

Credit-builder loans are specifically designed to help build credit. The lender holds the loan amount in a savings account while you make monthly payments. Once paid off, you get the money back and have a positive payment history.

Step 4: Report Rent and Utility Payments

Services like RentTrack and Experian Boost can report your rent and utility payments to credit bureaus, adding positive payment history to your file.

Step 5: Practice Good Credit Habits

• Pay every bill on time, every time
• Keep credit utilization below 30%, ideally below 10%
• Don't close old accounts
• Monitor your credit reports regularly
• Only apply for new credit when necessary

Timeline Expectations

• 0-3 months: First accounts appear on your report
• 3-6 months: Initial FICO score generated (often 600-650)
• 6-12 months: Score improves to 680-720 with perfect payment history
• 12+ months: Qualify for better cards and loans

Track Your Progress

Check your credit reports every 3 months and monitor your score. Use OriumAI to identify any errors that could be holding you back.