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You may have heard the saying, 'to get credit, you need to have credit' — which can be pretty frustrating as a credit newbie.
Most milestones in life, such as buying a house or leasing a car, require credit history, but if your credit score is low (or nonexistent), you will likely find it hard to get approved or you may face higher interest rates. The majority of credit cards also require some sort of credit history in order to qualify, with only a handful of cards made for people with no credit.
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One of the quickest and easiest ways to build credit is by becoming an authorized user on a family member or friend's credit card. As an authorized user, you can piggyback off the primary account holder's credit and as a result, establish your own credit history. Authorized users also have zero liability, so this is a low-risk way to build credit. Plus, you might even get some special perks as an authorized user, such as airport lounge access.
But before you become an authorized user, make sure your family member or friend has good credit and uses their credit card responsibly. You don't want to become an authorized user on an account that has debt or late payment history, since those negative actions will appear on your credit history and counteract any credit building you plan on achieving.
Also, make sure you practice responsible behavior as well. You'll want to make a clear plan for how you'll pay back any purchases you make with the card, so you don't risk wracking up debt on someone else's card.
Secured credit cards are a great way to build credit if you have none. These cards are typically easier to qualify for if your credit history is poor or non-existent. And you can use a secured card just like a traditional (aka unsecured) credit card to help you establish good credit, as long as you practice responsible credit behavior.
A secured card is nearly identical to an unsecured card in that you receive a credit limit, can incur interest charges and may even earn rewards. The main difference is you're required to make a security deposit in order to receive a line of credit. The amount you deposit typically starts at $200 (though it can start as low as $49) and often becomes your credit limit. So if you make a $200 security deposit, you'll receive a $200 credit limit.
The Discover it® Secured Credit Card card tops our list for the best secured credit cards by offering cardholders cash back, a generous welcome bonus and no added fees on purchases outside the U.S. — all for no annual fee. Starting at seven months from account opening, Discover will automatically review your account to see if they can transition you to an unsecured line of credit and return your deposit.
Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
Discover will match all the cash back you've earned at the end of your first year
N/A on purchases
Balance transfer fee
3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
Foreign transaction fee
New / Rebuilding
*See rates and fees, terms apply.
If you want to start building credit without a credit card, there are some alternatives. A number of financial institutions offer credit building tools, but they may charge a monthly fee. However, Experian provides a free and easy to use tool: *Experian Boost®.
This service lets you get credit for paying monthly utility, cell phone and streaming service bills on time, which has the potential to boost your credit scores. Qualifying streaming payments currently include Netflix®, HBO™, Hulu™, Disney+™ and Starz.
Simply connect the bank account(s) you use to pay your utility and cell phone bills, verify the data and confirm you want it added to your Experian credit file. You'll get an updated FICO® Score instantly and also receive a free copy of your Experian credit report. Learn more about how Experian Boost works.
Every person's credit journey is unique so there's no hard-and-fast rule about how long it will take to build credit. The major credit scoring models generally require two to six months of credit activity to generate a credit score. However, if you're starting from scratch, it may take a bit longer to actually achieve a good credit score.
The minimum age to establish a credit score is generally 18 since that's the minimum age to open a credit card. That said, it's possible for minors to start building credit before that age by being an authorized user on someone else's credit card.
It can seem daunting at first to start building credit with no credit history, but it can be done with a few simple steps. Consider establishing credit with one of the best credit cards for building credit.
For rates and fees of the Discover it® Secured Credit Card, click here.
*Results will vary. Not all payments are boost-eligible. Some users may not receive an improved score or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost®.