• Ideal for: anyone unsure if they have a credit report 
  • Ease of Implementation: relatively easy, takes just a little time
  • Timeframe for results: instantaneous after entering the required information
  • Cost: there is no cost
  • Risk: there is no risk involved 
  • Effectiveness: it helps to know where you’re starting from when building credit 
  • Sustainability: can check monthly
  • FinImpact score: 5/5


Takes the guesswork out of wondering if you already have a credit report
It’s free
Provides you with a starting point to measure your progress


Takes time to make inquiries

Many people have a credit report without even knowing it. Service providers you’ve been doing business with and to whom you’ve been making regular monthly payments may be reporting your payment history. There are a few ways you can check if you already have a credit report:

  • Go to Annual Credit, enter the required personal information, and see if you have a credit report under your name. Be sure to check it for accuracy.
  • Check with each of the three major credit bureaus – Experian, Equifax, and TransUnion – and see if you have a credit report with them. 

Both of these methods will reveal if you already have a credit report on file, and you can see your credit score at this point. 

Step Two: Get Credit for Bills You Already Pay

  • Ideal for: anyone who wants to build credit quickly
  • Ease of Implementation: takes some time and effort
  • Timeframe for results: possibly within a month or less
  • Cost: there may be a short-term cost
  • Risk: risk of a negative report from your landlord
  • Effectiveness: It will have a major impact on your credit score
  • Sustainability: sustainable once started
  • FinImpact score: 4/5 


You will improve your credit score
Can get you off to a fast start building credit
Plenty of free ways to get credit for on-time payments to existing creditors


Possible negative impact if you’ve been late with payments
You may need to landlord’s fee to report to credit bureau

Did you know you can get credit for bills you already pay, like your phone bill, rent, and utilities? In many cases, your service provider is reporting your payment history and whether you make on-time or late payments. Here are several ways you can get credit for bills you already pay: 

  • Ask your creditors. Ask your creditors to report your on-time payments to the credit bureaus if they aren’t already. This might require you to volunteer to pay the fee that your creditor will have to pay to the credit bureau if they’re not already paying it. However, it’s not a hefty fee, and it’s well worth paying to establish credit. 
  • Use third-party services. These services can be used without verification from your landlord. Two you can check out are PayYourRent and ClearNow
  • Use Experian Boost: The credit bureau Experian offers a free service called Experian Boost, which they claim will get you credit for the bills you already pay and raise your credit score (FICO) instantly – for free. 

Step Three: Become an Authorized User on a Family Member Credit Card 

  • Ideal for: anyone who wants to build credit quickly
  • Ease of Implementation: takes some time and effort
  • Timeframe for results: possibly within a month or less
  • Cost: there is typically no cost for you to be added
  • Risk: risk strained relationships and negatively impacting your relative’s credit score
  • Effectiveness: It will have a positive impact on your credit score if your relative has good credit
  • Sustainability: sustainable once started
  • FinImpact score: 4/5 


Can quickly improve your credit score
Can get you off to a fast start building credit
There is usually no charge to add you to the card


It may be hard to ask family for help
Can strain relationships if you adversely affect their credit score

If you have family members that have established good credit, they may be able to add you as an authorized user to one or more of their credit cards. Here are the finer points:

  • Being added can boost your score quickly
  • There is usually no charge for you to be added
  • You don’t need to have possession of a card or use it 

If family members don’t have good credit or are reluctant to help, consider asking a close, trusted friend.

Step Four: Open a Starter Credit Card

  • Ideal for: students who want to build credit
  • Ease of Implementation: takes some time and effort
  • Timeframe for results: possibly within a month or less
  • Cost: annual fee for student cards and cash deposits for unsecured cards
  • Risk: can ruin credit for years if used irresponsibly
  • Effectiveness: Can quickly have a positive impact on your score 
  • Sustainability: sustainable once started
  • FinImpact score: 2/5 


Helps establish good credit habits
Can have a card issued with no credit history
The added convenience of not needing to carry cash


Secured cards require a cash deposit upfront
Irresponsible use can cause damaged credit early in life

Having your own credit card is a big step forward, though getting a regular credit card with no established credit may be difficult. One way to combat that is by getting a starter credit card, of which there are several types: 

  • Student credit cards: these cards for high school and college students help establish credit and often come with cash back rewards and other perks. Credit limits are lower than regular credit cards, and interest rates are usually higher.  
  • Secured credit cards: a secured credit card can be opened by depositing money with the credit card issuer that becomes your line of credit. You can then spend that amount of money until you deposit more funds. 

Step Five: Use Your Card Responsibly for at Least 6 Months

  • Ideal for: anyone who wants to build credit 
  • Ease of Implementation: takes willpower and self-discipline
  • Timeframe for results: six months
  • Cost: high interest if the balance is not paid in full each month
  • Risk: risk of injured credit if the card is used for wants, not needs
  • Effectiveness: It will have a very positive impact on your credit score 
  • Sustainability: sustainable once started
  • FinImpact score: 4/5 


Will help you get more credit in the future
Can get you off to a good start building credit
Helps establish good financial habits


Will hurt the credit score of people who use credit irresponsibly
Can have a negative long-term impact on your credit reports
The temptation to buy things you don’t need is greater

Once you are issued a credit card, secured or unsecured, creditors will begin reporting your activity to the credit bureaus at least monthly. Using it responsibly for at least six months will help you be approved for additional credit in the future, like student loans and personal loans (see the FinImpact review of best personal loans for people with good credit). Using your credit card responsibly means: 

  • Making payments on time. Even a single late payment of 30 days can hurt your credit score, especially when credit is first established. 
  • Don’t request a credit limit increase. Don’t ask the card issuer to raise your credit limit for the first six months. This can open the door for them to do a “hard credit pull,” which is then listed on your credit reports and can hurt your credit score.
  • Use your card for needs, not wants. Don’t be afraid to use your card, but use it wisely. Using it only to buy things you need will help keep your balance low and payment manageable. 
  • Stay under 30% of your total credit limit. Staying under 30% helps your “credit utilization,” which is a significant determinant of your credit score (30%).
  • Pay your balance off every month. If you only make your minimum monthly payment, you’ll be paying a high amount of interest that will cost you money and reduce your available credit. In addition, carrying an unpaid balance each month can lead to negative long-term implications, such as hurting your credit score and creating a bad credit habit. 

Step Six: Regularly Check Your Credit Report and Score 

  • Ideal for: anyone who wants to ensure the accuracy of their credit report
  • Ease of Implementation: takes some time and effort
  • Timeframe for results: possibly within a month or less if errors are corrected promptly
  • Cost: no cost for checking monthly in 2023, one free report annually beginning in 2024
  • Risk: no risk involved in checking your score
  • Effectiveness: it can have a positive impact if errors are spotted and corrected promptly
  • Sustainability: sustainable once started
  • FinImpact score: 5/5 


Can help you catch errors on your credit report
It’s motivating to watch your score climb
There is no cost to check your credit score monthly through the end of 2023


Need to put on your calendar to remember to check your score
Takes time to request report and make corrections if necessary

Part of having and building credit is regularly checking your credit report and score. It’s important for several reasons:

  • You can catch errors and report errors on your credit report that are lowering your credit score 
  • It is motivating to watch your credit score climb 
  • You can make sure creditors and your landlord are reporting your payment history to the credit bureaus 


Additional Ways to Start Building Your Credit for the First Time 

Following the six steps outlined above will positively impact your credit score, and relatively quickly. While they’re a great starting point, there are still some other effective ways for you to start building your credit: 

Have a Family Member or Friend Co-Sign a Loan  

Having a relative or friend you can trust co-sign for you: 

  • Will possibly help you get approved for a loan you wouldn’t have been able to take out
  • Uses their good credit to your advantage
  • Provides you with a safety net if your income takes a downturn 

Take Out and Pay for a Credit Builder Loan  

A credit builder loan is an underutilized tool to help build credit. It works differently than a conventional loan. With a credit builder loan you: 

  • Make your payments before receiving any money from the lender
  • Receive payment after you’ve paid the loan in full
  • Have your payment history reported on your credit report
  • Get a loan you never would have gotten traditionally 

Be sure you can easily make the required monthly payment, as missing payments will hurt your credit.

Open Credit Card Accounts at Retail Stores 

When you open new credit cards at retail stores you shop at: 

  • You lengthen your credit history
  • You learn to use credit responsibly
  • You can get discounts when you pay with your card 

Don’t apply for too many cards at one time; it can end up hurting your credit score, not helping it. 

Finance a Purchase Using an Interest-Free Offer 

Many large retailers offer zero financing, and your payment history is reported to the credit bureaus. This helps you: 

  • Purchase items you couldn’t have without the offer
  • Have on-time payments reported to the credit bureaus
  • Establish your credit  

Lease a Car from a Lender That Reports to Credit Bureaus 

  • Not all lenders report leases to credit bureaus
  • Reporting your on-time lease payments counts the same as on-time car loan payments 

Take Out Student Loans

  • Having a mix of loans that includes student loans helps your credit more than simply having credit cards
  • Can help you pay for an education that will increase your income for the rest of your life


What You Need to Know About Building Credit for the First Time  

If you’re starting to build your credit for the first time, you may have many unanswered questions. These are some we’re frequently asked: 

Why do I Need to Build Credit? 

Building good credit helps you get higher loan amounts and better interest rates, live in nicer places because landlords and mortgage companies often decline people with poor credit, and get better jobs because employers see you as more reliable than someone who mismanages credit. 

What are the Minimum Requirements for a Credit Score? 

All that’s needed to get a credit score is to have a creditor report your payment history to the credit bureaus, which is why you want to make your first on-time payment as soon as possible after being approved. 

How Quickly Can I Establish My Credit? 

You can establish your credit score as soon as 30 days. Credit reports are usually updated at least once a month.

How Often Does Your Credit Score Update? 

It’s up to the credit bureau to decide how often they update credit reports and scores, but they usually do it monthly. 

How Long Does It Take to Build Good Credit? 

Many people are pleasantly surprised to find that their first on-time payment shows up as a positive on their credit report within a month. 

Why Does Having More Credit Improve My Credit Score? 

Having more credit improves your score because it indicates you can handle credit responsibly. The key is not to apply for too many cards at one time, which is a red flag to lenders. 

Do I Need to Go Into Debt to Build Credit? 

Absolutely not. Even a credit builder loan doesn’t put you into debt. You’ll only be taking on unnecessary debt if you don’t pay your credit card bills in full each month and end up paying high interest charges. 

How Can I Build Credit Fast? 

You can build credit fast by combining any of the steps just discussed. 


Tips for Beginners Who Are Building Credit for the First Time 

Here are some helpful tips if you’re building your credit for the first time. 

  • Do Your Research to Understand How Credit Scores are Calculated: If you know how credit scores are calculated, you can take action accordingly. 
  • Find Financial Institution That Are Beginner-Friendly: Financial institutions that are beginner friendly will offer secured credit cards, credit-builder loans, and other financial products for beginners, like debit cards tied to a checking account. They can easily be found online.
  • Understand the Requirements Before Opening Credit Accounts: It’s always a best practice to read any legally binding agreement, like a credit card application, before you open an account. There are plenty of scams out there, so be sure to read the fine print and check out the institution issuing the card.
  • Start Small and Avoid Submitting Too Many Applications: By starting small, you avoid creating too much debt too quickly, which can damage your credit. Applying for too many cards or loans at one time is a red flag to lenders. Instead, take it one step at a time and space out your loans by at least 90 days.
  • Dispute Errors on a Credit Report: Errors on credit reports happen regularly, which is why you should check yours regularly. If you see an error, dispute it and have it removed as soon as possible.
  • Don’t Miss Payments or Default: Nothing hurts your credit worse than missing payments and eventually defaulting on a loan. If you’re going to be late with a payment, notify your lender and ask them not to report it to the credit bureaus.
  • Avoid Late Fees and Interest Charges: You can avoid these costs by paying your credit cards in full and on-time every month. This will also boost your credit score.
  • Use Your New Card Responsibly: By not abusing credit, you’ll be granted more credit at more favorable terms. Credit is a privilege that you don’t want to have taken away.
  • Shop Around for the Best Card Offer: There are credit card issuers with better terms than their competitors. Check out at least three companies to find the best one for you. 


How to Get Your First Credit Card? 

You can get your first credit card by following these steps: 

  • Determine whether student credit cards are an option for you
  • Compared secured and unsecured starter cards
  • Limit your search to cards with the lowest fees
  • Choose the best offer for your needs
  • Confirm you have enough income
  • Typically, you won’t need documentation to get a credit card approved; only the application needs to be submitted. However, loans will require additional documentation 


Secured vs. Unsecured Cards

Secured and unsecured credit cards can help you build credit from scratch. These are a few things to know before applying:

  • A secured card requires you to deposit money upfront, which then becomes your credit limit
  • It is much easier to be approved for a secured card
  • Activity on both types of cards is reported to the credit bureau


Final Word

Establishing credit takes time, but following the steps above can shorten the time frame. Start building credit slowly but steadily, and you’ll be able to secure better borrowing terms, nicer places to live, and better jobs. Be sure to make on-time payments, as they make up the bulk of your credit score.

Frequently Asked Questions(FAQ)

What’s the easiest way to establish credit history?

The easiest and quickest way is to get a secured credit card. Making your first on-time payment can establish your credit history in 30 days or less.

Can you get a credit score without a credit card?

Yes. Taking out a loan, like a credit-builder loan, will get you a credit score.

Does paying off my credit card every month hurt my credit score?

Paying your card off every month won’t hurt your credit score; it will actually help your score and show potential creditors that you’re a good credit risk.

How do you build an excellent credit score?

Follow the steps and tips given above and be patient. You can build good credit quickly, but achieving an excellent credit score can take months or longer.

About the Authors

Bob Phillips

Written by: Bob Phillips

Financial advisor and content writer

Bob has 15 years of experience as as a financial advisor/trainer/agency manager for several major financial services companies. He earned numerous awards for personal production and agency leadership during his financial career.

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