How to Start Building Credit

If you're wondering how to start building credit, you're not alone. Many people find the process confusing when they first begin, but it doesn’t have to be overwhelming. Building credit from scratch is all about taking small, smart steps that show lenders you can handle borrowed money responsibly. Whether you’re aiming to qualify for a future loan, rent an apartment, or land your dream job, starting your credit journey today can open more opportunities tomorrow.

Why Building Credit Early Matters

When you start building credit early, you create more options for yourself. A strong credit profile can help you qualify for better loan rates, apartment leases, and even jobs. Some careers, like financial advisors and firefighters, may check your credit during the hiring process. Without a history of borrowing and repaying, it can be harder to access financial services at affordable rates.

Your credit score tells lenders how risky it might be to lend you money. Building it from the ground up shows that you are reliable. Knowing how to start building credit can give you a real head start toward financial independence.

First Steps: How to Start Building Credit

If you're wondering how to start building credit, one of the simplest ways is with a secured credit card. These cards require a deposit, usually a few hundred dollars, that sets your credit limit. By using the card for small purchases and paying the full balance on time each month, you begin creating a positive payment history.

Another option is to become an authorized user on someone else's account. If a family member or close friend adds you to their credit card, you might benefit from their positive payment record.

Some services can even help you report your utility and phone payments to the major credit bureaus. Programs like Experian Boost let you get credit for payments you’re already making, helping you jumpstart your credit file.

Exploring Credit Builder Loans

Credit builder loans are designed for people who are new to credit or want to rebuild their scores. Instead of getting money upfront, you make small monthly payments into a locked savings account. Once you finish the term, you get the money back, minus a small interest charge. Throughout the loan, your payments are reported to the credit bureaus.

Choosing a reputable provider matters. Cheers Credit Builder offers flexible monthly plans ranging from as low as $24 per month¹. There are no membership fees or setup costs², just a fixed 12.15% APR³. All monthly payment activities⁴ are reported to the three major credit bureaus.

Building Credit Without a Credit Card

Credit cards are a helpful tool, but they aren’t the only way to build credit. If you prefer to avoid them, rent reporting services, credit builder loans, and even certain subscription services can help.

Using a credit builder loan like Cheers can be a smart way to start. Cheers welcomes everyone, including immigrants, and provides an accessible path to start building a financial future. Your monthly payments grow your savings, while your positive payment history helps build your credit profile.

Cheers welcomes everyone, including immigrants, and provides an accessible path to start building a financial future. Your monthly payments grow your savings, while your positive payment history helps build your credit profile.

If you're new to credit and looking for a smart place to start, Cheers Credit Builder offers a solution that works quietly in the background while you focus on your goals.

Good Habits That Keep Your Credit Growing

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.

Building credit doesn’t stop once you open an account. To keep growing your credit, make payments on time, every time. Payment history is the biggest factor in your credit score.

Keep an eye on your credit utilization if you use credit cards. Experts recommend keeping your balance below 30% of your limit—and under 10% is ideal. Low utilization signals to lenders that you manage credit responsibly. You can also check your credit reports for free each year at AnnualCreditReport.com.

A few simple habits, like setting up auto-payments and tracking your spending, can keep your credit healthy for years to come.

(The opinions expressed in this article are the author’s own and do not reflect the view of Sunrise Banks⁶.)

References:

• Experian Boost – https://www.experian.com/blogs/ask-experian/what-is-experian-boost/‍
• CNBC – https://www.cnbc.com/select/what-is-a-good-credit-utilization-ratio/

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¹ 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.

² No Hidden Fees:


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

³ APR Comparison & Affordability:


Cheers Interest is calculated using an amortized repayment schedule at a fixed 12.15% Annual Percentage Rate (APR). Comparable products may charge APRs up to 36%, according to publicly available terms. Cheers also charges no administrative or hidden fees.

⁴ 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.

⁵ 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

⁶ 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.