A positive credit history can unlock a lot of opportunities, like lower rates on auto loans or mortgages. It can even help you rent an apartment.
But what if you’ve never had credit? It can be overwhelming to get started from scratch. After all, it’s hard to show you have a positive credit history if you’ve never had the chance to build credit.
Luckily, there are ways to build your credit history even if you’ve never had credit.
It’s a record that shows how good you’ve been at making credit payments in the past. With every on-time payment — the biggest factor in making up your credit score — you’ll build a positive credit history that’s reflected by your credit score. A higher score implies you’re more likely to make on-time payments in the future.
Once you start building your credit history, it’s a good idea to monitor both your credit report and credit score so you can spot anything that might be inaccurate.
If you don’t have credit history, no worries! Look into applying for a secured credit card or a credit-builder loan. You can also start reporting your bill payments, like rent and utilities, to the credit bureaus.
If you have no credit, a secured credit card or a credit-builder loan might be a good place for you to start. You could also become an authorized user on someone else’s credit card.
FICO® credit scores range from 300–850. “Good” scores range from 670–739.
While there’s no specific timeframe in which you can expect your credit score to grow, you can start doing things right now to improve your score. Follow the steps above, and your credit will improve as soon as you build up enough positive credit history to outweigh any negative marks.
Good news if you don’t have credit: Making small changes can result in a noticeable boost. Here’s what to do.