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“Help! I have no credit.” 3 tricks for building your credit from zero

1 minute read

Having no credit history can be a big problem. Everyone says you need credit to build better credit. But it’s hard to get credit at all if you don’t have any credit! What are you supposed to do?

The good news is that you can get past this problem. Here are 3 tips for building your credit:

  1. Get a credit card and use it responsibly. You may need to get a secured card or an unsecured credit card for bad credit or no credit. Use the card to buy small items like a pack of gum or cup of coffee. Then pay your bill on time every month.
  2. Apply for a credit builder loan.  Some local credit unions offer small loans of $300 to $1,000 that help you build credit. The credit union will put the money in a locked savings account. You then make regular payments until you “pay off” the loan. You then get access to the money. Even better, it helps you save money.
  3. Get a retail credit card.  Many gas stations, clothing shops and other stores offer credit cards. It may be easier to get one of these cards than it is to get a regular credit card. Make small purchases with the card and pay your bill on time.

You are building credit any time you get and use credit from a bank or business that reports to one of the three major U.S. credit bureaus , Equifax, Experian and TransUnion. Make sure to always pay on time to build a good credit history.

Information:

Building credit from scratch: https://files.consumerfinance.gov/f/documents/201612_cfpb_credit_invisible_checklist.PDF

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Daniel Quiroz

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