How To Build Credit When You Have None

Establishing credit when you have none can be challenging. If you don’t have it, lenders are less willing to extend it to you because they don’t have a gauge to measure your creditworthiness. So what are you supposed to do?

People who are new to credit sometimes fall into the trap of seeking costly alternatives such as payday loans. Instead of falling into a cycle of debt, you just need a little planning and discipline. 

There are many ways to build your credit when you’re just starting out. Chances are, you may already be doing a few things that are doing precisely that. Cashay explains how to build your credit when you have none.

What Do You Need To Build Credit?

Every lender wants assurance that you are a safe borrower. If you don’t have credit, lenders can assess other factors to determine your creditworthiness, such as:

Steady Employment History

If you have a stable job, you pose a lower risk to lenders. Things such as gaps in your history or if you often switch jobs are red flags to lenders. You should be mindful of your job history while you establish credit and in the future because it’s a key component of your creditworthiness.

Secure Housing History

Another warning signal to lenders is a history of frequent moves — as in, relocating every year or more. To them, frequent moves might be a sign of financial instability. Since your addresses are reported to the three major credit bureaus, you should try to move as little as possible.

Responsible Banking History

Your bank or credit union may not report your account history to the credit agencies, but your activity can still affect your creditworthiness. If you seldom have overdrafts or maintain minimum balance requirements, lenders will be more willing to approve you. After all, if you are financially responsible, you’re likely to be the same with your line of credit. 

On-Time Utility Payments

Lenders look at your billing history from your phone, cable, internet, utility, and other providers. If you have an account in your name, make sure you pay your bills on time because it will affect your lender’s ultimate decision.

Minimal Medical Debt

Medical bills can be one of the most challenging forms of debt to repay, but if you have an outstanding balance, you should try to pay it down as much as possible. Even though not every medical institution reports medical debts, it’s better to act as if yours does.

When it comes down to it, lenders simply want to know that you are a reliable borrower. When you have a history of on-time bill payments, steady employment, and secure housing, lenders will be much more willing to approve you for a credit card or personal loan.

How To Apply For Your First Credit Card

If you check all the qualifications above, you might want to consider getting your first credit card. However, even though you might be a dependable borrower, lenders may still be apprehensive. When you apply for a credit card, look for ones designed specifically for borrowers with minimal credit. Here are a few places to begin your search:

Retail Chains

Have you ever been offered a discount for applying for a store credit card? Many brands provide them and offer discounts as a way to encourage new cardholders. While people with established credit typically avoid store cards because of their high interest rates, they are one option for first-time credit card seekers.

Store credit cards may offer a lower credit limit, but this is usually enough when you’re trying to build your credit. Make sure you use your card regularly and don’t rack up a large balance. And of course, make sure you can pay the monthly statement on time and in full.

Your Financial Institution

If you already have a checking or savings account with a bank or credit union, you might consider applying for one of their credit cards. You might have a higher chance of approval since you already have a relationship with the institution. Although approval isn’t guaranteed, this should be the first place you try.

Secured Credit Cards

Secured credit cards are typically designed for people who are new to credit or have bad credit, so your odds of approval are high compared to unsecured cards. You may have to pay a deposit as collateral with a secured credit card, but not every issuer requires this. Secured cards can be more affordable than unsecured cards and may even offer rewards. Research your options to find the best card for you.


  • Fitness, Financial. “How to Build and Establish Credit: The Full Breakdown.” Cashay, Cashay, 5 Feb. 2020,
Ian Schindler