If you’ve ever wondered how you build credit, you’re not alone. A strong credit score can help you get approved for loans, rent an apartment, and even secure better insurance rates. Some employers also conduct credit checks during the hiring process, meaning a good credit history could lead to more career opportunities. Learning how to build credit the right way can open more doors and save you money over time.
How Do You Build Credit From Scratch?
Understanding how you build credit starts with knowing what makes up a credit score. Your credit score ranges from 300 to 850 and is based on five main factors:
- Payment History (35%): Paying your bills on time is key.
- Credit Utilization (30%): Keep balances low on your credit cards.
- Length of Credit History (15%): The longer you’ve had credit, the better.
- Credit Mix (10%): A mix of credit cards and loans can help.
- New Credit (10%): Don’t open too many new accounts at once.
To build credit, focus first on making on-time payments. Even one missed payment can affect your score. If you’re new to credit, start with a secured credit card or a credit builder loan to create a positive payment history. You can learn more about what goes into your credit score from the Consumer Financial Protection Bureau.
How Do You Build Credit Without a Credit Card?
Many people ask how do you build credit if you don’t want a credit card. The good news is, you don’t need a credit card to grow your score. Here are other ways:
- Credit Builder Loans: These loans hold your payments in a savings account while you build credit. Once the loan ends, you get your money back, minus interest.
- Report Rent and Bills: Use services that report your rent or utility payments to credit bureaus.
- Become an Authorized User: A trusted friend or family member can add you to their credit card, and their good habits help your score.
For more ways to safely build credit, visit MyCreditUnion.gov, which offers helpful tips and tools.
Start Building Credit with Cheers
If you want a faster and simpler way to build credit, Cheers Credit Builder is a good tool. You don’t need a credit check to join. With Cheers, you pick a plan that fits your needs and make monthly payments¹. Your payments are securely held in a Certificate of Deposit (CD) and returned to you at the end of the term, minus interest.
Here’s what you get with Cheers:
- No membership or setup fees², just a fixed 12.15% APR.
- Cheers uses accelerated reporting³, so your account and first payment are reported to all three credit bureaus within 15 days of account opening.
- You build credit while saving money, not by spending it.
Sarah’s Story: Building Credit from Zero
Let’s look at Sarah, a recent college graduate who moved to a new city for her first job. She had never used a credit card and didn’t have any loans, so she had no credit history. When she tried to rent an apartment, her landlord told her she needed a credit score.
Sarah asked herself: how do you build credit when you’ve never borrowed before?
She started by opening a secured credit card with a $200 deposit. She used it for small expenses, like groceries, and paid it off every month. She also signed up for a credit builder loan through a fintech app. Each month, she paid $25, and the app saved her money in a secure account. Every month, these payments were reported to all three credit bureaus.
Within six months, Sarah’s credit score went from nonexistent to 680. She was able to rent her apartment, and now she’s working on reaching 700+.
How Do You Track Progress?
After you start building credit, it’s smart to check your credit reports. You can get a free report every year from each bureau at AnnualCreditReport.com. Watch for mistakes and make sure all your payments are showing up.
To keep building your score:
- Keep credit card balances below 30% of your limit.
- Always pay on time.
- Don’t apply for too much new credit at once.
- Keep old accounts open to build a longer history.
How Do You Build Credit in 2025? Use Tech to Help
In 2025, it’s easier than ever to build credit with the help of apps and fintech tools. Many people are now asking, how do you build credit using technology?
If you want to take action today, here are 5 useful websites that can help you start building credit in 2025:
- Check your credit report for free at annualcreditreport.com to know where you stand and catch any errors early.
- Apply for a secured credit card through platforms like Discover to establish a safe payment history.
- Open a credit builder loan with Cheers to automate payments and build credit while saving money.
- Report your rent payments using services like RentReporters to add more positive history to your credit profile.
- Use budgeting apps like Credit Karma that not only monitor your credit but also offer personalized recommendations.
Using the right tools makes the process smoother, but the basics never change — on-time payments, low balances, and monitoring your credit regularly are still the foundation for building strong credit.
Conclusion
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.
If you’ve been wondering how do you build credit, remember this—good credit helps you get better deals, lower interest rates, and more options in life. Building credit takes time, but you can make real progress with the right steps. Start small, stay consistent, and use tools that make the process simple.
(The opinions expressed in this article are the author’s own and do not reflect the view of Sunrise Banks4.)
References:
- Consumer Financial Protection Bureau – http://consumerfinance.gov
- MyCreditUnion.gov – http://mycreditunion.gov
- AnnualCreditReport.com – http://annualcreditreport.com
- Discover – https://www.discover.com/
- RentReporters – https://www.rentreporters.com
- Credit Karma – https://www.creditkarma.com
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 No Hidden Fees:
There are no application fees, maintenance fees, or early cancellation penalties.
³ Accelerated Reporting:
Accelerated reporting applies to the opening of your account, plus the first payment. Credit bureau reporting occurs monthly thereafter
⁴ 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.
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