Asked by John  |  Submitted January 20, 2015

As someone with no credit, what would be the best way to start building credit?

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  Answers  |  4

January 22, 2015

I found it was easier to start with a store retail credit card verses a major credit card company.

$commenter.renderDisplayableName() | 07.26.17 @ 14:46

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September 19, 2015

Having rebuilt my credit from practically scratch at least 3 times I would say to apply to a credit card like Capital One with a low credit line. They will increase your limit after you prove on time payments and your credit score will improve faster if you pay more than the minimum. Another option is to approach your bank or federal credit union and see if they have credit building loans and cards. Good luck.

$commenter.renderDisplayableName() | 07.26.17 @ 14:46

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September 22, 2015

Hi John, If you're a "ghost", meaning you have no prior credit activity (good or bad) on your report, the process is fairly simple and shouldn't take more than a few months of activity. Ask about a major credit card (M/C or Visa typically) where you bank, and if they won't give you an unsecured card, ask about secured cards. For those, borrowers give the issuing bank a deposit (often $500 or so), and get a card with the credit limit equal to the deposit. Use the card monthly, pay it off on time or early, keep the balance at 30% or so of the credit limit, and you'll soon have decent credit scores.

If you have prior derogatory accounts on your credit, you'll likely have to get a secured card. I'd still start locally, as on line lenders often have high application/processing costs that can approach $100. Ideally, get a couple of secured cards and (when possible) an installment loan. Ask your bank if they offer secured installment loans. The credit scoring models like to see a mix of accounts, so having two types (revolving and installment) will boost your scores quicker than just revolving accounts by themselves.

Hope this helps! Ted

$commenter.renderDisplayableName() | 07.26.17 @ 14:46

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June 14, 2016

The best option would be a secured credit card with a minimum limit of $1,000. Just remember that you're securing the credit card with your own funds at which some time in the future when you're able to get unsecured credit cards you will get that money back. Stay away from the big credit card companies that pull your credit to see if they want to issue a secured credit card. Good luck!

$commenter.renderDisplayableName() | 07.26.17 @ 14:46

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