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5 Ways to Build Credit from Zero

The concept of credit is often not well understood by individuals that don’t have any credit to speak of. However, credit is a necessity if you want to move forward in life and get loans, apartments, and sometimes even jobs. Without credit, lenders will have trouble trusting you to pay them back, and they may deny you services and other amenities.

If you haven’t yet built up a credit rating, there are several ways you can build up your score. One of the easiest ways to build a high credit score is to pay utility bills on time, such as cable, water, electricity, or your cell phone bill. What are some other ways you can build credit from zero, you ask? Let’s take a look.

Secured Credit Cards

When starting from zero, secured credit cards are one of the best methods you can use to build your score. When looking for a secured card, try to find one that reports to at least one credit bureau so that the credit line you add on contributes to your score.

With secured cards, you will need to make a deposit if you want to be approved for a line of credit. If you miss a payment, your deposit will be used to cover it. As long as your payments are made on time each month, your deposit will be given back to you and you’ll be able to close your account.

Pay Bills on Time

On time payments are one of the most effective ways to build credit fast, even if you don’t have any starting credit. Payment history accounts for a large portion of your FICO score, making it one of the largest factors for credit scores. If you’re going to be using your credit card, try to keep your purchases small so you can pay them back easily.

Try to avoid having a balance on your credit cards or missing payments, as this could negatively impact your score. Setting up reminders to pay bills or using automatic payment features can save you a lot of time and trouble along with getting rid of the risk of missing a payment.

Regular Credit Cards

Getting a regular credit card is another way you can easily build credit. Many banks provide credit cards, but you’ll need to look for one that is right for you and preferably doesn’t have high annual fees. You can find the perfect credit card by using companies like Nova Credit or speaking with a banking professional near you.

If you already have a secured credit card, you may be able to migrate your account to a regular card instead of closing your secure card and applying for a brand new card. By transferring your line of credit, you avoid an extra credit inquiry and there are no negative implications for your score.

Store Credit Cards

Concerned about taking on the responsibility of a credit card from a bank? You can start off small with a store credit card, which individuals can get approved for even if they have no credit. The drawback of store cards, though, is they often have high interest rates and low spending limits.

When it comes to building up a good credit score, sometimes it’s beneficial to use these cards frequently and keep a small balance. Credit agencies and banks pay attention to your ‘credit utilization ratio’ which shows how much of your credit you are actively using. Targeting a credit utilization of around 30 percent or lower will build your score instead of lowering it.


Yet another way you can build your credit without taking on as much responsibility is to become an authorized user on another individual’s credit card. However, you should make sure that this person has good credit and their payment history is clean so you know they will be a positive factor towards your credit.

If things go wrong, you’ll be responsible for debt and for making payments each month. This gives the individual a bit of power over your credit, so piggyback on someone that is financially responsible and prompt with payments.

These are just a few of the ways you can quickly and easily build your credit. If you’re worried about getting a home loan, approval for purchasing a vehicle, and any other big purchases, assessing your credit and learning how to increase your score is an essential part of the process. Understanding how important credit is gives you a jump start towards your goals and building the life you desire.