How to build credit

Starting from scratch? Take a look at some of the best ways to build your credit.
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Now’s the time to start

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.

What’s a credit history, anyway?

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.

3 of the best ways to build credit

Get a Varo Believe Card.

If you’re looking for a good secured credit card to build credit, we’ve got you covered. With Varo Believe, you can build credit no matter where you’re starting.* First, you add money to your Vault Account that determines your spending limit.** (Don’t worry. You can move what you don’t spend.) Then, you use your credit card and pay your balance on-time and in-full. You can monitor your credit score directly in the Varo app for free.

Get a credit-builder loan.

These loans are designed specifically to help you build credit. With a credit-builder loan, you make payments toward the loan with no access to the money until you’ve paid the loan off. Your payments are reported to the three major credit bureaus. Once you’ve paid the loan off, you have access to the money. Varo’s partner, Self^, offers credit-builder loans.

Get credit for bills you’re already paying.

There are services that report your payments like rent and utilities to the three major credit bureaus, which can help you build credit. With Varo’s partner, LevelCredit^^, you can automatically report your bills to help raise your score.

More ways to build credit

  1. Make on-time payments.

    If you’re looking for a good secured credit card to build credit, we’ve got you covered. With Varo Believe, you can build credit no matter where you’re starting.* First, you add money to your Vault Account that determines your spending limit.** (Don't worry. You can move what you don't spend.) Then, you use your credit card and pay your balance on-time and in-full. You can monitor your credit score directly in the Varo app for free.

  2. Keep your credit utilization as low as possible.

    If you’re looking for a good secured credit card to build credit, we’ve got you covered. With Varo Believe, you can build credit no matter where you’re starting.* First, you add money to your Vault Account that determines your spending limit.** (Don't worry. You can move what you don't spend.) Then, you use your credit card and pay your balance on-time and in-full. You can monitor your credit score directly in the Varo app for free.

  3. Become an authorized user on someone else’s card.

    When someone adds you as an authorized user on a credit card, your credit benefits just from being on the account — you don’t even have to use the card. This may only have a small impact on your credit, because technically, it’s someone else’s responsibility to repay the debts. Keep in mind, being an authorized user can hurt your score if the primary cardholder doesn't pay on time. Be sure to ask someone you trust.

  4. Keep credit accounts open.

    This makes up 15% of your credit score. Having accounts that have been open longer make you look better to lenders and credit card issuers. It’s best not to close an account just because you’re not using it.
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Stay on top of your credit

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.

  • Get your report from AnnualCreditReport.com and check for any errors.
  • There are many free services to check your credit score. With Varo Believe, you can monitor your score in the Varo Bank app for free.

What’s the difference?

Your credit report shows your history of using credit in the past. Your credit score uses the info from your credit report to predict how you’ll use credit in the future.

How to build credit FAQ

How do I start building credit?

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.

How can I build my credit if I have no credit?

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.

What’s a good credit score?

FICO® credit scores range from 300–850. “Good” scores range from 670–739.

How fast can I raise my credit score?

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.

How can I raise my credit in 30 days?

Good news if you don’t have credit: Making small changes can result in a noticeable boost. Here’s what to do.

  • Pay bills on time.
  • Pay your cards more than once a month.
  • Request a higher limit.
  • Dispute errors on your credit report.
  • Open a secured credit card account.
  • Keep your credit accounts open.
  • Become an authorized user on someone else’s account.
  • Use a service that adds your bills like rent and utilities to your credit report.

Start qualifying for Varo Believe.

Get a Varo Bank Account today!

Applying won’t impact your credit score.

Do you already have a Varo account?

How can we help you?

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When did you open your account?

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Before October 1, 2020

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After October 1, 2020