How Do You Start Building Credit?


Quick Answer

A common starting point to building credit is to get a credit card and use it responsibly over time. On-time payments account for 35 percent of a person's FICO credit score, according to NerdWallet. A challenge is that it is difficult to get a standard card without a credit history.

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Full Answer

A person with no credit has a couple options to acquire initial credit. One is to get a "secured" credit card. With this card, the borrower actually deposits funds into an account to back up the borrowing activity, according to Bank of America. Lenders are more willing to issue a card to someone without history if a deposit is being held. Another option is to have a parent include a child as an authorized user on a credit account. Being an authorized user helps build credit, according to Experian.

Time is required to build credit, so starting early before major purchases such as homes and cars helps. Length of credit history impacts 15 percent of a person's FICO score, according to NerdWallet. While it is good to use a credit account regularly to demonstrate responsible use, it is also important to make on-time payments and to maintain a low debt-to-limit ratio. Amounts owed accounts for 30 percent of a credit score, according to NerdWallet, so maintaining a low debt-to-limit ratio is a positive.

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