7 Smart Ways to Build Credit in 2025

Tip No. 1: Understanding Credit Scores

Your credit score is a number that helps lenders decide how likely you are to repay debt. Most scores range from 300 to 850 and are based on factors like payment history, credit use, and account age. MyFICO breaks down these elements clearly. A higher score gives you access to better interest rates and more financial options.

Tip No. 2: Start Small with a Credit Card

A secured credit card is a good way to start building credit. You deposit money upfront, and that becomes your spending limit. If you make payments on time and keep your balance low, this can show lenders you’re reliable. Student credit cards are also a helpful option if you’re in school. However, since credit cards can come with high interest rates and specific rules & regulations to follow, it is essential to have a proper understanding of the interest and payments due. The benefit will come from your appropriate use of the card. Always make sure the card reports to all three credit bureaus: Equifax, Experian, and TransUnion.

Tip No. 3: Try a Credit-Builder Loan

A credit-builder loan (such as Cheers) is a tool designed to help you build credit while saving money. With Cheers, your monthly payments toward a loan are securely held in a Certificate of Deposit (CD). When the term ends, you get the money back, minus interest. According to FICO®¹, 35% of your credit score is based on payment history, and 10% is based on credit mix. Cheers reports your monthly payment activities² to all three major credit bureaus — Equifax, Experian, and TransUnion, which helps you build both your payment history and your credit mix.

Cheers Credit Builder offers flexible monthly plans ranging from as low as $24 per month³ (building credit with less than $1 per day) without setup or monthly fees. All monthly payment activities² are reported to the three major credit bureaus. You don’t need a credit score to start, and there's no hard credit check. Once you meet the identification criteria, you can open an account in just a few minutes. Cheers uses accelerated reporting⁴, so your account and first payment are reported to all three credit bureaus within 15 days of account opening.

Tip No. 4: Get Added as an Authorized User

Ask a family member or friend with strong credit to add you as an authorized user on their card. You don’t need to use the card to benefit. Their on-time payments will show up on your credit report and might help you grow your scores. Just make sure their account is in good standing before you’re added.

According to Experian, credit card companies that report a primary cardholder’s account to all three major credit bureaus—Experian, TransUnion, and Equifax—typically also report authorized-user accounts to those bureaus. One thing to keep in mind when being an authorized user is that the lack of payments from an authorized user will also be reflected on their score.

Tip No. 5: Watch Your Credit Utilization

Credit utilization is the ratio of your credit card balances to your credit limits. According to Bankrate, experts recommend keeping this below 30%, but those with excellent credit keep it under 10%. For example, if your card has a $1,000 limit, try to stay below $100 to $300 in charges at any time.

You can lower your utilization by paying balances before the statement date or requesting a higher credit limit. 

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Tip No. 6: Check Your Credit Reports Regularly

You can get a free credit report from each major bureau once a year at AnnualCreditReport.com. Look for errors like incorrect account details or late payments you didn’t make.

Reviewing your reports also helps you watch for identity theft or fraud—another important part of protecting your credit.

Tip No. 7: Ways to Build Credit Without a Credit Card

Not a fan of credit cards? You still have solid options.

• Report Rent Payments: Services like RentTrack or Self Inc. can add your monthly rent to your credit report.
• ‍Use a Co-Signer: Apply for a loan with someone who has good credit. Their backing helps you get approved and build your score with on-time payments. For both the primary and co-signer, all monthly payment activities² are reported to the three major credit bureaus.
• Try a Credit-Builder Loan Instead: If you want to build credit while saving money, Cheers Credit Builder is one of the easy tools out there. You can choose a plan based on your budget and financial goals. With Cheers, there’s no credit check to apply, get approval once you meet the identification criteria. Cheers is built to be fast, affordable, and easy to use, and here is why:
  1. Help build payment history and increase credit mix¹ , key components of your credit score
  2. ‍Accelerated reporting to all three credit bureaus in as little as 15 days⁴
  3. A low 12.15% APR with no hidden fees⁵
  4. Full savings return at the end of your term, minus interest
  5. Cancel anytime⁶, with no penalties

Final Note

This content is for informational purposes only and does not constitute financial advice. Please consult a licensed financial advisor or tax professional before making any financial decisions.

No matter your starting point, you can build credit with steady, smart habits. Keep payments on time, avoid unnecessary debt, and check your progress often. Whether through cards, loans, or alternative tools like Cheers, there are real ways to grow your score—and your financial confidence. Cheers to building credit!

(The opinions expressed in this article are the author’s own and do not reflect the view of Sunrise Banks⁷.)

References:

• MyFICO – https://www.myfico.com/credit-education/credit-scores
• Equifax – https://www.equifax.com/personal/
• ‍Experian – https://www.experian.com/
• Experian – https://www.experian.com/blogs/ask-experian/are-authorized-user-accounts-reported-to-all-three-bureaus/
• ‍TransUnion – https://www.transunion.com/
• Bankrate – https://www.bankrate.com/credit-cards/advice/credit-utilization-ratio/
• Self Inc. – https://www.self.inc/
• ‍AnnualCreditReport.com – https://www.annualcreditreport.com‍
• ‍RentTrack – Report Rent to Credit Bureaus – https://www.renttrack.com/

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¹ FICO® Credit Factors:


According to FICO®, 35% of your credit score is based on payment history, and 10% is based on credit mix. Cheers reports every payment and adds a secured installment loan to your profile. Source: myFICO： https://www.myfico.com/credit-education/whats-in-your-credit-score

²  Payment Activity:

All payment activity is reported to the credit bureaus. On-time payments may help build your credit, while late or missed payments may negatively impact it. Results are not guaranteed and depend on your individual financial behavior and credit profile.

³ Credit Builder Account Plans: 

All plan options include a 24-month term, 25 total payments and a 12.15% Annual Percentage Rate (APR).
Plan A: Total Payments of $600 with $532.70 Amount Financed. $24 Monthly Payments and $67.30 Total Interest.
Plan B: Total Payments of $825.02 with $733.13 Amount Financed. $33 Monthly Payments and $91.89 Total Interest.
Plan C: Total Payments of $1,149.98 with $1,021.69 Amount Financed. $46 Monthly Payments and $128.29 Total Interest.
Plan D: Total Payments of $3,600.00 with $3,197.82 Amount Financed. $144 Monthly Payments and $402.18 Total Interest.

⁴ Accelerated Reporting:


Accelerated reporting applies to the opening of your account, plus the first payment. Credit bureau reporting occurs monthly thereafter

⁵ No Hidden Fees:


There are no application fees, maintenance fees, or early cancellation penalties.

⁶ Cancel Anytime & Get Savings Back:


At the end of your term, your total savings (minus interest) is returned to you. You can cancel your account at any time without penalty.

⁷ Sunrise Banks:


Cheers is a financial technology company and not a bank. Banking services are provided by Sunrise Banks N.A. Your funds are FDIC insured up to $250,000 through Sunrise Banks, N.A., Member FDIC.  Results are not guaranteed. Improvement in your credit score is dependent on your specific situation and financial behavior. Failure to make monthly minimum payments by the payment due date each month may result in delinquent payment reporting to credit bureaus, which may negatively impact your credit score. This product will not remove negative credit history from your credit report. All loans are subject to approval. Must be at least 18 years old, have a valid U.S. bank account, and a Social Security Number.