5 Simple Steps to Start Building Your Credit Score Today
Building credit does not have to be complicated. Whether you are starting from scratch or rebuilding after financial difficulties, these five steps will put you on the path to a stronger credit score.
Step 1: Check Your Current Credit Report
Before you can improve your credit, you need to know where you stand. You are entitled to one free credit report from each of the three major bureaus (Equifax, Experian, and TransUnion) every year through AnnualCreditReport.com.
Look for errors such as accounts you do not recognize, incorrect balances, or outdated negative information. Dispute any errors you find, as they could be dragging down your score.
Step 2: Get a Secured Credit Card
If you have no credit or poor credit, a secured credit card is one of the best tools to start building. You provide a security deposit (usually $200-$500), which becomes your credit limit.
Use the card for small purchases and pay the balance in full each month. This builds positive payment history without accruing interest.
Step 3: Become an Authorized User
Ask a family member or close friend with good credit if they will add you as an authorized user on their credit card. Their positive payment history can be reported on your credit report, giving your score a boost.
Make sure the card issuer reports authorized user activity to the credit bureaus, and that the primary cardholder has a good payment history.
Step 4: Pay All Bills On Time
Payment history is the most important factor in your credit score (35%). Set up automatic payments or calendar reminders to ensure you never miss a due date.
Even non-credit bills matter. Some services like Experian Boost allow you to add utility and phone payments to your credit report.
Step 5: Keep Credit Utilization Low
Credit utilization (how much of your available credit you are using) accounts for 30% of your score. Aim to keep it below 30%, but under 10% is even better.
If your limit is $500, try to keep your balance under $150. Pay down balances before your statement closing date for the best results.
The Bottom Line
Building credit takes time, but consistency is key. Follow these steps, be patient, and you will see your score improve over the coming months. Check out our Credit Score Guide for more detailed information on how scores work.